Licensing requirements for VA activities in Hong Kong

1. SFC VATP Licence (AMLO Schedule 3B)

Since 1 June 2023, anyone carrying on a business of providing a "VA service" - currently confined to operating a VA exchange - in Hong Kong, or actively marketing such services to the HK public from overseas, must be licensed by the SFC under Schedule 3B of AMLO.

Who needs it

• Any centralised platform that allows clients to trade VAs (whether or not those VAs are securities).
• Operators based outside HK who actively market exchange services to the HK public.
• Both retail-facing and PI-only platforms.

Dual licensing

A VATP that lists tokens which are "securities" typically also needs Type 1 (dealing in securities) and Type 7 (ATS) under the SFO. The SFC operates a streamlined "single applicant" process so an operator can apply for the AMLO VATP licence and the SFO Type 1/7 licences together.

Core requirements (SFC VATP Guidelines)

• HK corporate vehicle: company incorporated in HK (or registered non-HK company) with a permanent place of business in HK.
• Two Responsible Officers: at least two ROs who are also Licensed Representatives, fit-and-proper, with relevant experience.
• Financial resources: minimum paid-up share capital of HK$5,000,000 and minimum liquid capital of HK$3,000,000.
• Custody: client VAs held on trust through an associated entity that is a HK company holding a TCSP licence; at least 98% of client VAs in cold storage, no more than 2% in hot wallets.
• Insurance / compensation: covering 50% of cold-storage assets and 100% of hot-storage assets (insurance, third-party guarantee, on-platform reserves, or a combination).
• Token admission / due diligence: smart-contract audits, legal opinion, project team review, token admission/review committee.
• Market surveillance: real-time market manipulation/abuse surveillance and rules; independent auditor and penetration testing.
• AML / CTF: AMLO Schedule 2 compliance, including the FATF Travel Rule.
• Cybersecurity: SFC's cybersecurity guidelines for licensed corporations apply, plus the 14 Aug 2025 enhanced custody circular.

Retail access and "eligible large-cap" tokens

For retail clients, a VATP may only provide trading in tokens that meet the SFC's "eligible large-cap virtual asset" criteria - inclusion in at least two acceptable indices issued by two independent index providers, with at least one having experience in traditional non-digital-asset markets. Retail customers must also pass:

• suitability and risk profiling;
• knowledge tests on VAs;
• exposure limits based on net worth / risk tolerance.

Transitional / deeming arrangement

Pre-existing platforms operating in HK before 1 June 2023 had a 12-month transitional period. The deadline for filing a deemed-licensed application closed on 29 February 2024; non-filers were required to wind down HK-facing operations by 31 May 2024. Several platforms (e.g. OKX HK, Bybit HK applicants) withdrew and ceased HK marketing.

2. SFO Licences Relevant to VAs

The SFO's Type 1-10 regulated activities all apply to VAs where the VA is a "security" or "futures contract". The SFC has further "uplifted" several RAs to extend to non-security VA activities under the SFC-HKMA Joint Circular.

Type 1 - Dealing in Securities (with VA uplift)

• Required by intermediaries dealing in security tokens.
• A Type 1 LC wishing to distribute non-security VAs or provide VA dealing services (including via omnibus account at a SFC-licensed VATP) must obtain the VA-dealing uplift by notifying the SFC and meeting Joint Circular conditions.

Type 2 - Dealing in Futures Contracts

Applies where VA derivatives qualify as "futures contracts". Currently very limited; the SFC has signalled further consultation on a VA-derivatives regime for retail.

Type 4 - Advising on Securities (with VA uplift)

Required for advice on tokenised securities, tokenised funds, security tokens and (with uplift) for advising clients on non-security VAs.

Type 7 - Providing Automated Trading Services (ATS)

Required for any platform providing matching/order-book services for security tokens. Most VATPs that list any security token will need both VATP and Type 7.

Type 9 - Asset Management (with VA uplift)

• De minimis (less than 10%): standard Type 9 obligations apply.
• 10% or more in VAs: manager must comply with the SFC's "Terms and Conditions for Persons Licensed by or Registered with the SFC for the Purpose of Managing a Portfolio that Invests in Virtual Assets" - safe custody, valuation, risk management, audit, segregation, disclosure.

3. HKMA Stablecoin Issuer Licence (Stablecoins Ordinance)

The Stablecoins Ordinance (Cap. 656) was passed on 21 May 2025 and commenced on 1 August 2025. It is administered by the HKMA.

Who needs it

Any person who, in the course of business:

• issues a fiat-referenced stablecoin (FRS) in Hong Kong;
• issues an FRS that references the Hong Kong dollar (wherever issued); or
• actively markets issuance of an FRS to the HK public.

Core requirements

• HK incorporation (or HK branch for an authorised institution).
• Minimum paid-up capital of HK$25 million (or 1% of par value of stablecoins issued, whichever is higher).
• Full reserve backing at all times in high-quality, highly liquid assets matching the referenced fiat currency, held with a qualified custodian and legally segregated.
• Redemption at par within a reasonable period (typically T+1).
• Clearly disclosed stabilisation/peg mechanism. Algorithmic stablecoins are not eligible.
• Independent reserve audit and monthly attestations.
• AML/CTF, sanctions, fit-and-proper, risk management, disclosure, recovery and wind-down planning.
• Travel Rule compliance for stablecoin transfers.

Sandbox

The HKMA launched a Stablecoin Issuer Sandbox in March 2024. Initial sandbox participants included Jingdong Coinlink Technology Hong Kong, RD InnoTech, and a consortium of Standard Chartered HK / Animoca Brands / HKT. Sandbox participation is not a licence but informs the HKMA's licensing approach.

Marketing prohibition

Offering an unlicensed FRS to retail in HK is a criminal offence. Only stablecoins issued by licensed issuers may be marketed to retail. Professional investor offers and offers that are not "active marketing" are subject to narrower carve-outs.

4. Type 13 RA and VA custody

A new Type 13 RA - "Providing depositary services for relevant CISs" - was added to the SFO and commenced on 2 October 2024. Type 13 covers depositaries of SFC-authorised public funds.

Status for VA custody

A separate dedicated regime for stand-alone VA custodians is in development. The 24 December 2025 Consultation Conclusions (FSTB / SFC) confirmed the policy direction - the proposed regime will sit under SFC supervision, with extraterritorial reach over services actively marketed to HK investors. A bill amending AMLO is targeted for LegCo introduction in 2026. In the interim, VA custody is regulated indirectly through:

• VATP-associated entity custody (Schedule 3B);
• TCSP custody licences;
• SFC's expectation that licensed asset managers use SFC-acceptable VA custody arrangements;
• the 14 Aug 2025 enhanced custody circular - cold-wallet controls, governance, insurance.

5. VA Dealer / OTC Regime

The FSTB issued a public consultation paper in February 2024 proposing a new licensing regime for VA OTC service providers - shops and online services that exchange fiat for VAs without operating an order book.

Scope as proposed

• Physical OTC shops and online OTC desks dealing in any VA in or from HK.
• SFC-administered, with extraterritorial reach.
• AML/CTF, fit-and-proper, conduct, disclosure and consumer protection requirements.

Status

Consultation conclusions were published on 24 December 2025; a parallel consultation on VA adviser and VA asset-manager regimes opened the same day. Until commencement, OTC activity is governed by general AMLO requirements, MSO rules where applicable, and the SFO where the VAs are securities.

6. Dealing in VAs on behalf of others - the Joint Circular

For SFC-licensed corporations and HKMA-registered institutions wishing to provide VA-related services, the SFC-HKMA Joint Circular on intermediaries' VA-related activities is the central document. Originally issued 28 October 2022, updated 22 December 2023, and supplemented on 30 September 2025.

Permitted activities

• Distribution of VA-related products (VA funds, VA structured products, VA derivatives offered by overseas regulated venues): subject to product due diligence, investor categorisation, and (for retail) "complex product" requirements.
• Dealing in VAs via omnibus account at a SFC-licensed VATP.
• VA advisory under uplifted Type 4.
• VA dealing services - non-securities VAs are dealt with on the basis of the AMLO licence carried by the executing VATP, with the LC's role limited to client onboarding, suitability and order routing.

Investor protection

• Knowledge test for retail clients (unless prior VA trading experience).
• Suitability assessment, including risk tolerance and concentration risk.
• Disclosure of risks (volatility, custody, regulatory, technology).
• Restrictions on retail offering of complex VA products (VA derivatives, VA leveraged products) - generally limited to PIs.
• The 30 Sep 2025 supplemental circular relaxes net-worth assessment and risk-disclosure for institutional / qualified corporate PIs in VA futures, and confirms that in-kind subscriptions/redemptions of VA funds are not separately treated as VA dealing.

7. The practical matrix

8. Cross-cutting requirements

• AML / CTF (AMLO Cap. 615): customer due diligence, ongoing monitoring, suspicious transaction reporting to JFIU, sanctions screening (UN, HK Autonomous Sanctions, OFAC where applicable).
• FATF Travel Rule: under SFC's VATP Guidelines and HKMA AML guidance, VASPs must collect, hold and transmit originator/beneficiary information for VA transfers above HK$8,000 equivalent, including counterparty due diligence with the receiving VASP.
• Personal Data (Privacy) Ordinance (Cap. 486): data protection enforced by the PCPD.
• Market conduct: SFC Code of Conduct, prohibitions on market manipulation and insider dealing (where security tokens are involved).
• Advertising: only licensed VATPs may advertise VA dealing services to the HK public; only licensed stablecoin issuers may advertise issuance of stablecoins. Misleading advertising is a criminal offence under SFO s. 107/108 for securities and AMLO equivalents for VA services.

9. Cost and timeline overview

Fees are published by the SFC at sfc.hk - Forms and fees and by the HKMA at hkma.gov.hk.

10. Currently licensed VATPs

As of late 2025, the SFC publishes a Public Register of Licensed Corporations and Registered Institutions which now includes a dedicated VATP register. Notable licensed VATPs:

• OSL Digital Securities Limited - licensed since 2020 (Type 1/7), now also licensed under AMLO Schedule 3B; retail-eligible.
• HashKey Exchange (Hash Blockchain Limited) - licensed Type 1/7 + AMLO; retail-eligible since August 2023.
• HKVAX (Hong Kong Virtual Asset Exchange), Accumulus GBA, DFX Labs, Hong Kong Digital Asset EX, Thousand Whales, PantherTrade - granted licences during the deemed-licensing review process in 2024-2025.

Always check the live register at apps.sfc.hk/publicregWeb.

Penalties for unlicensed activity

• Unlicensed Type 1 dealing under SFO s. 114: max HK$5,000,000 fine + 7 years' imprisonment.
• Unlicensed VA service under AMLO s. 53ZRA: max HK$5,000,000 + 7 years, plus continuing-offence daily fines.
• Unauthorised offer of investments under SFO s. 103: max HK$500,000 + 3 years.
• Unlicensed FRS issuance under the Stablecoins Ordinance: max HK$5,000,000 + 7 years.
• Personal liability extends to directors and Responsible Officers under SFO s. 390 and the AMLO equivalent.

Sources

• SFC - VATP Guidelines and FAQs
• SFC Licensing Handbook
• SFC-HKMA Joint Circular on Intermediaries' VA-related Activities (22 Dec 2023)
• Supplemental Joint Circular (30 Sep 2025)
• HKMA - Stablecoin Regulatory Regime
• FSTB Consultation Papers (VA OTC, Custody, Adviser/Manager)
• SFC Public Register
• SFO (Cap. 571)
• AMLO (Cap. 615)
• Stablecoins Ordinance (Cap. 656)