Legislative Proposal to Regulate Dealing in Virtual Assets is a Hong Kong proposal from the Financial Services and the Treasury Bureau and the Securities and Futures Commission to create a licensing or registration regime for virtual asset dealing service providers under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). As of 17 June 2026, the proposal has not been enacted and no commencement date has been set. The authorities have published consultation conclusions and are preparing an amendment bill for the Legislative Council.
The proposal is part of Hong Kong’s broader digital asset framework, which already includes the virtual asset trading platform licensing regime and the stablecoin issuer regime. Official materials frame the dealer proposal as one of the remaining service-provider regimes needed to cover key nodes of the digital asset ecosystem. This profile is for reference and does not provide legal advice.
Key provisions of Hong Kong’s virtual asset dealing proposal
SFC licensing or registration
The revised proposal would require a person carrying on a business of virtual asset dealing in Hong Kong to be licensed by, or registered with, the SFC unless an exemption applies. Banks and stored value facility licensees would register with the SFC, with the Hong Kong Monetary Authority expected to act as frontline regulator for those institutions. The framework would sit under the AMLO and would include fit-and-proper, AML/CFT and other regulatory requirements.
Type 1-style regulatory perimeter
The consultation conclusions state that the scope of virtual asset dealing will be aligned with Type 1 regulated activity, dealing in securities, under the Securities and Futures Ordinance. In broad terms, the perimeter covers business conduct that makes or offers agreements, or induces agreements, to acquire, dispose of, subscribe for or underwrite virtual assets. The proposal remains activity-based, so the analysis turns on service substance rather than the label used by a provider.
Client asset custody and safeguards
For client virtual assets held in connection with dealer activity, the conclusions indicate that SFC-regulated virtual asset dealers will be required to custody client assets with SFC-regulated virtual asset custodian service providers. The authorities linked this approach to asset segregation, insolvency risk, fraud and cybersecurity concerns. The SFC also said it would consider operational feasibility and issue regulatory requirements in due course.
Active marketing, powers and sanctions
The proposal would prohibit unlicensed or unregistered persons from actively marketing virtual asset dealing services to the Hong Kong public, whether the marketing occurs in Hong Kong or elsewhere. It would also give the SFC and, where relevant, the HKMA supervisory and enforcement powers under the AMLO. The proposed sanctions are intended to align with Hong Kong’s existing virtual asset trading platform regime.
Status and timeline
The Government first consulted in February 2024 on regulating over-the-counter virtual asset trading services. After market feedback, the FSTB and SFC issued a revised consultation paper on 27 June 2025 for a broader virtual asset dealing regime. That consultation closed on 29 August 2025, and consultation conclusions were published on 24 December 2025.
Following a further consultation on advisory and management services, the FSTB and SFC stated in May 2026 that they were finalising proposals for virtual asset dealing, custody, advisory and management regimes, with a target of introducing the relevant bill to the Legislative Council within 2026. On 1 June 2026, an Acting Secretary for Financial Services and the Treasury told the Legislative Council Panel on Financial Affairs that the Administration was formulating the amendment bill and targeting submission within the year.
Implementation issues to monitor
The authorities do not plan to provide a deemed-licensed transitional arrangement for existing virtual asset dealing service providers. Instead, the regime is expected to take full effect on commencement of the relevant statutory provisions, with the effective date still undetermined. The Government and SFC have said they will consider the time market participants need to adjust business models and have encouraged early pre-application engagement.
Key open items for editors to monitor include the formal bill title, bill number, commencement provisions, final exemptions, SFC regulatory requirements, and any final treatment of margin trading, staking, borrowing and lending within the dealer perimeter.