Crypto licence in Hong KongOverview
Since 1 June 2023, anyone operating a centralised virtual asset exchange in Hong Kong, or actively marketing one to Hong Kong investors, must be licensed by the SFC under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Because platforms often trade tokens that may be securities, the SFC strongly prefers operators to hold both the AMLO licence and SFO licences, so that all tokens traded fall within supervision. Licensed platforms may serve retail investors subject to suitability, knowledge assessment, exposure limits and strict token admission rules.
The standard is demanding. Operators need HK$5 million in paid-up share capital, liquid capital above the prescribed minimum and liquid assets in Hong Kong covering 12 months of operating expenses. Client assets must be held through a wholly owned, Hong Kong-incorporated associated entity holding a trust or company service provider licence, with 98% in cold storage and private keys kept securely in Hong Kong. A compensation arrangement must cover 50% of client assets in cold storage and 100% of those held elsewhere, and annual financial and technology audits are required.
Two further pillars are being built. The Stablecoins Ordinance requires issuers of fiat-referenced stablecoins in Hong Kong to be licensed by the HKMA. The government has also concluded consultations on licensing virtual asset dealing and custody services, with proposed capital of HK$5 million paid-up for dealers and HK$10 million for custodians, and on advisory and management services aligned with SFO Types 4 and 9. Drafting is under way, with introduction expected in the fourth quarter of 2026 and no deeming arrangements for existing operators.
For OTC desks, brokers and custodians, the practical message is to prepare now: governance, capital and responsible officers will need to be in place when the new licences open. Firms already licensed for securities in Hong Kong can often extend their permissions to virtual assets more efficiently than new entrants.
Key benefits
- Clear licensing pathway with retail access permitted under robust safeguards
- Recognised regulator with strong international standing
- Dedicated stablecoin licensing regime under the HKMA
- Upcoming licences for dealing, custody, advice and management create a full value chain
- Access to Asian institutional capital and banking
- Common law system with deep professional services market
Requirements
- Hong Kong-incorporated company, or overseas company registered in Hong Kong, with a place of business in Hong Kong
- HK$5 million paid-up share capital, liquid capital above the required minimum and 12 months of operating expenses in liquid assets
- At least two responsible officers, including an executive director, all fit and proper
- Qualified IT manager and independent risk management and compliance functions
- Wholly owned Hong Kong associated entity with a TCSP licence holding client assets
- 98% of client virtual assets in cold storage and a compliant compensation arrangement
- Token admission and review committee and published admission criteria
- AML/CFT controls, including travel rule compliance and transaction monitoring
- Annual audited accounts and independent technology audit
Licence options & capital
VATP licence (AMLO + SFO)
HK$5m paid-up capital
For centralised trading platforms, including retail-facing venues, with custody through an associated entity.
SFO Type 1 virtual asset dealing
Existing securities brokers can add virtual asset dealing by uplifting licence conditions, subject to SFC requirements.
VA dealing licence (proposed)
HK$5m paid-up (proposed)
For OTC desks and brokers once the new licensing bill is enacted; the SFC may also require an operating-expense buffer.
VA custody licence (proposed)
HK$10m paid-up (proposed)
For independent custodians of virtual assets once the bill is enacted.
Stablecoin issuer licence
HKMA licence under the Stablecoins Ordinance for issuing fiat-referenced stablecoins in Hong Kong.
Step-by-step process
- 1
Regulatory scoping
Determine which licences apply, whether tokens are securities and whether retail access is intended.
- 2
Set up the structure
Incorporate the operator and associated entity, capitalise and secure Hong Kong premises.
- 3
Appoint people
Recruit responsible officers, an IT manager, risk and compliance staff and licensed representatives.
- 4
Build controls
Implement custody, wallet, cyber, token admission, AML and market surveillance systems.
- 5
Submit to the SFC
File licence applications with the business plan, policies and an external assessment report where required.
- 6
SFC review and approval-in-principle
Respond to SFC requisitions and complete the second-phase external assessment before final licensing.
- 7
Ongoing supervision
File monthly and annual returns, maintain compensation cover and complete annual audits.
Typical documents
- Licence application forms for the corporation and each responsible officer
- Business plan, organisational chart and financial projections
- Evidence of share capital and liquid capital
- Custody and wallet management policies with cold storage arrangements
- Compensation arrangement documentation (insurance, guarantee or other)
- Token admission and review policy
- AML/CFT policy and risk assessment
- Cyber security, business continuity and outsourcing policies
- Fitness and propriety documentation for substantial shareholders and officers
- External assessment report on systems and controls
How Legal Wealth helps
Legal Wealth supports clients considering Hong Kong as their Asian base for digital assets. We help define the right licence path, design the operator and custody structure, and coordinate the responsible officers, external assessors and advisers needed for an SFC or HKMA application. For OTC and custody businesses, we prepare readiness plans for the forthcoming dealing and custody regimes. We handle shareholder and personal information with discretion and can coordinate the licensed group with the principals' residence and wealth planning in Hong Kong.
Enquire with Legal WealthFrequently asked questions
Can a licensed platform serve retail investors?
Yes, subject to knowledge assessments, suitability, exposure limits and the SFC's token admission criteria.
How much capital is required for a VATP?
HK$5 million paid-up share capital, liquid capital above the prescribed level and liquid assets in Hong Kong covering 12 months of operating expenses.
Do OTC desks need a licence today?
Dedicated dealing licences are still being legislated, with a bill expected in Q4 2026. OTC desks should review current AMLO, SFO and money service operator rules and prepare for the new regime.
How many VATPs are licensed?
The SFC's list showed 13 licensed platforms on 29 September 2026.
Who regulates stablecoin issuers?
The HKMA licenses issuers of fiat-referenced stablecoins under the Stablecoins Ordinance.
Last reviewed: 2026-10. Requirements, fees and timelines change. Information is general, reviewed on the date shown, and is not legal or tax advice.