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Hong Kong Moves to License Crypto Dealers and Custodians, Targeting 2026 Legislation

Regulators say securities‑style oversight under AML/CFT rules is intended to reduce custody risk to draw institutional participation.

Overview

  • FSTB and the SFC said they will finalize proposals after a consultation that drew more than 190 responses and plan to table a bill to LegCo in 2026.
  • Dealer licensing would apply a “same business, same risks, same rules” approach comparable to securities dealing, covering OTC desks and brokers.
  • The custodian regime focuses on strict private key controls and segregation of client assets to mitigate counterparty risk.
  • The measures form part of the SFC’s ASPIRe roadmap and support Hong Kong’s push to build a regulated crypto hub distinct from mainland China and competitive with Singapore.
  • A separate consultation to extend oversight to virtual asset advisers and managers is open, with comments due Jan. 23, following earlier steps such as staking approvals and spot crypto ETFs.