Hong Kong is promoting the incorporation of virtual asset consulting and management services into regulation. A lawyer stated that this move reflects Hong Kong's intention to complete its local crypto asset licensing framework. The Hong Kong Special Administrative Region hopes to bring all major components of the digital asset ecosystem under formal regulatory oversight.

Andrew Fei, a partner at Allen & Overy in Hong Kong, stated: “As the market expands beyond purely centralized trading platforms to encompass investment advice, portfolio construction, discretionary management, and product distribution, it becomes increasingly important to ensure that these activities related to virtual assets are subject to regulatory standards comparable to those in traditional securities markets.”

Virtual Asset Consulting and Management System

The Securities and Futures Commission (SFC) of Hong Kong stated in a release that the upcoming crypto regulatory framework will align with the licensing framework under the Securities and Futures Ordinance for regulated activities in Type 4 (advice on securities) and Type 9 (asset management) under the principle of "same business, same risks, same rules."

The SFC and the Financial Services and the Treasury Bureau (FSTB) jointly released a consultation summary. This round of consultation was conducted from December 24, 2025, to January 23, 2026. The regulators indicated that market participants generally support the relevant proposals.

These proposals will expand the virtual asset dealer and custodian system implemented in Hong Kong on December 24, 2025.

The SFC stated that regulating the entire virtual asset service chain, including trading, custodial, consulting, and management, will enhance participation in Hong Kong's digital asset market under the ASPIRe roadmap and promote the development of a robust and secure ecosystem.

ASPIRe (A Safe and Progressive Innovation-based Regulatory pathway) aims to support a resilient virtual asset ecosystem, promote sustainable growth, and address emerging challenges such as liquidity fragmentation and regulatory arbitrage. The roadmap focuses on five main pillars: access, protection, products, infrastructure, and relationships, aiming to enhance investor protection and institutionalize the ecosystem.

Fei stated: “Clearly defining regulatory boundaries helps reduce regulatory arbitrage, enhance investor protection, and create a more predictable environment for banks, intermediaries, asset management companies, and other market participants.”

He added: “In this sense, the system is not merely about strengthening regulation, but rather facilitating responsible innovation in a framework that is market-trusted and aligns with Hong Kong's broader goal of building a leading global, well-regulated digital asset center.”

Anti-Money Laundering and Counter-Terrorist Financing Impact

The SFC stated that it and the FSTB also plan to propose legislation later this year to incorporate the new virtual asset regulatory system under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AML/CTF Ordinance).

Fei stated: “As regulated financial institutions, virtual asset consulting and management service providers will be directly integrated into Hong Kong's anti-money laundering and counter-terrorist financing framework.”

He further pointed out: “Specifically, virtual asset consulting and virtual asset management service providers will be required to comply with relevant requirements in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, including customer due diligence, record-keeping, and so forth. This reflects a broader policy direction in Hong Kong in constructing a comprehensive and consistent regulatory framework for virtual assets, with robust anti-money laundering and counter-terrorist financing compliance as a key pillar.”

Impact

Fei stated that the new system will benefit Hong Kong's virtual asset industry by establishing an end-to-end regulatory framework for the crypto service chain.

He said: “By extending the licensing scope to virtual asset advisors and portfolio managers, Hong Kong is sending a signal that it seeks to support innovation in an orderly and properly regulated manner. This will enhance the overall integrity of the market and allow both institutional and retail investors to participate with greater confidence.”

He noted that in the short term, virtual asset service providers in Hong Kong will need to reassess their business models and licensing strategies under circumstances without deeming arrangements and with regulators calling for early pre-application communications. He believes that in the medium to long term, this new licensing system will strengthen the entire ecosystem by creating a more trusted environment.

Fei also stated that Hong Kong is advancing tokenization, stablecoin, and digital market infrastructure development under the government's LEAP framework, aiming to position Hong Kong as an international crypto asset hub.

The LEAP framework was proposed in the Hong Kong government's "Policy Declaration 2.0" on digital asset development released in June 2025 and consists of four components: regulatory optimization, tokenized product expansion, application scenario evolution, and talent development.

Comparison Between Hong Kong and Singapore

Fei stated that Hong Kong's unique advantage lies in the "increasingly comprehensive and coordinated digital asset regulatory framework" that covers virtual asset trading platforms, stablecoins, tokenized products, and future regulations on virtual asset trading, custodianship, asset management, and consulting services; he added that the overall regulatory framework is becoming clearer and more coordinated.

In the field of tokenization, Hong Kong helps connect high-quality assets from Mainland China with international on-chain capital.

He said: “Hong Kong's unique 'super connector' role is difficult for other jurisdictions to replicate.”

A legal professional from Singapore stated that the latest round of consultation indicates that Hong Kong is accelerating its move toward becoming Asia's virtual asset capital.

He indicated that Hong Kong's initiatives reflect a broader economic strategy that transcends mere regulation. In contrast, Singapore is increasingly focused on controlling risks related to crypto assets, while Hong Kong aims to help the industry grow.

He also noted that Singapore has consistently paid high attention to anti-money laundering and counter-terrorist financing requirements, consumer protection, and preventing crypto activities from undermining public trust in the overall financial system.