Is Crypto Legal in Hong Kong?

SFC — licenses VA trading platforms under AMLO Part 5B (13 licensed as of 12 October 2026) and SFO Types 1/7 for security tokens; supervision and enforcement

HKMA — licenses fiat-referenced stablecoin issuers under the Stablecoins Ordinance (Cap. 656, in effect 1 August 2025; first two licences 10 April 2026), supervises banks, runs the Fintech Supervisory Sandbox

FSTB — virtual asset policy (policy statements of October 2022 and 26 June 2025) and legislative proposals, including the VA dealer, custodian, advisory and management licensing bill targeted for 2026

JFIU — Joint Financial Intelligence Unit — suspicious transaction reports

AMLO (Cap. 615) Part 5B, inserted by the AMLO (Amendment) Ordinance 2022 (Ord. No. 15 of 2022, gazetted 16 December 2022), introduced mandatory SFC licensing of centralised virtual asset trading platforms from 1 June 2023; licensed platforms may serve both professional and retail investors, subject to SFC token-admission and investor-protection requirements.

Securities and Futures Ordinance (Cap. 571), in force since 1 April 2003: a virtual asset trading platform offering trading in security tokens needs SFC licences for Type 1 (dealing in securities) and Type 7 (providing automated trading services) regulated activities.

Stablecoins Ordinance (Cap. 656): passed by the Legislative Council on 21 May 2025 and in effect since 1 August 2025. Issuing a fiat-referenced stablecoin in Hong Kong, or a Hong Kong dollar-referenced one in or outside Hong Kong, requires an HKMA licence. The first licences, to Anchorpoint Financial Limited (FRS01) and HSBC (FRS02), took effect on 10 April 2026.

A VATP licence from the SFC under AMLO Part 5B has been mandatory since 1 June 2023. The SFC VATP Guidelines require paid-up share capital of at least HK$5,000,000 and liquid capital of at least the higher of HK$3,000,000 and the Financial Resources Rules basic amount (paras 6.2-6.3), storage of 98% of client virtual assets in cold storage (para 10.6(c)), and large-cap index tests for retail-tradable tokens (para 7.8). The SFC list shows OSL Exchange (licensed 15/12/2020) and HashKey Exchange (09/11/2022) as the earliest licensed platforms; 13 were licensed on 12 Oct 2026.

Under the SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023), a licensed platform operator must hold client assets on trust through a wholly owned Associated Entity (para 10.1), store 98% of client virtual assets in cold storage (para 10.6(c)), and keep an SFC-approved compensation arrangement covering 50% of client VAs in cold storage and 100% in hot and other storage (para 10.22). A separate licensing regime for VA custodians outside trading platforms is a proposal (FSTB/SFC conclusions of 24 Dec 2025), not yet law.

The SFC's public register of licensed persons and registered institutions lists all SFO licensees and registered institutions since 1 April 2003 and all AMLO licensees (licensed individuals and licensed providers) since the VASP regime commenced on 1 June 2023, searchable by name or CE number.

The SFC's List of virtual asset trading platform applicants (last updated 12 Oct 2026) includes applicants deemed to be licensed from 1 June 2024 under Schedule 3G to the AMLO (Cap. 615); the SFC states that deemed-to-be-licensed applicants are NOT formally licensed. On 12 Oct 2026 the list named 5 applicants, 2 of them deemed (Foris DAX HK / Crypto.com and Whalefin Markets / WhaleFin).

On 6 November 2019 the SFC adopted an opt-in framework for virtual asset trading platforms: a platform offering trading in at least one security token could apply for SFO Type 1 and Type 7 licences, under licensing conditions restricting services exclusively to professional investors; the SFC had no power to license platforms trading only non-security tokens. The mandatory AMLO Part 5B regime replaced this from 1 June 2023.

From 1 June 2023, Part 5B of the AMLO (Cap. 615) requires any person carrying on a business of operating a virtual asset exchange in Hong Kong, or actively marketing such services to the Hong Kong public, to be licensed by the SFC (ss.53ZRD and 53ZRB). Platforms that also trade security tokens need SFO licences in addition.

SFC-licensed virtual asset trading platforms may serve retail investors, subject to investor-protection requirements; under para 7.8 of the SFC VATP Guidelines a virtual asset admitted for retail trading must be an eligible large-cap virtual asset included in at least two acceptable indices from two different index providers.

The AMLO Part 5B licensing regime covers VA trading platforms dealing in non-security tokens; trading in security tokens remains under the Securities and Futures Ordinance (Cap. 571), with no transitional arrangement, and requires SFO licences for Type 1 (dealing in securities) and Type 7 (automated trading services) before such business starts. A platform offering both needs licences under both ordinances.

OTC virtual asset dealing is not covered by the AMLO Part 5B trading-platform licence. The FSTB and SFC consulted on a VA dealer licensing regime from 27 June to 29 August 2025 and published conclusions on 24 December 2025, aligning it closely with SFO Type 1 (dealing in securities); they target introducing the bill into the Legislative Council in 2026.

Hong Kong's stablecoin framework is in force: the Stablecoins Bill passed the Legislative Council on 21 May 2025 and the regime commenced on 1 August 2025, after the HKMA finalised its Supervision Guideline and AML/CFT Guideline for licensed stablecoin issuers on 29 July 2025.

Part XII of the SFC VATP Guidelines (June 2023) requires a licensed VATP to keep the trading system and custody infrastructure robust and properly maintained to minimise the risk of theft, fraud and other dishonest acts (para 12.1).

SFC-licensed VASPs must maintain AML/CFT Systems under the SFC AML/CFT Guideline (June 2023), including appointing a Compliance Officer at senior management level and a Money Laundering Reporting Officer as the central point for suspicious transaction reporting (para 3.6).

A licensed VATP should only hold client assets on trust for its clients through its Associated Entity, a wholly owned Hong Kong subsidiary holding a trust or company service provider licence that conducts no other business (VATP Guidelines June 2023, paras 1.1 and 10.1).

Under para 10.6(c) of the SFC Guidelines for Virtual Asset Trading Platform Operators (June 2023), a licensed VATP and its Associated Entity should store 98% of client virtual assets in cold storage, except where the SFC permits otherwise case by case.

A licensed VATP and its Associated Entity must establish strong internal controls and governance procedures for private key management so that all cryptographic seeds and private keys are securely generated, stored and backed up (SFC VATP Guidelines June 2023, para 10.8).

A licensed VATP must have an SFC-approved compensation arrangement covering potential loss of 50% of client virtual assets in cold storage and 100% of those in hot and other storage, via third-party insurance, set-aside funds or assets, or a bank guarantee (VATP Guidelines June 2023, para 10.22).

Except for institutional and qualified corporate professional investors, a licensed VATP must assess each client's virtual asset knowledge and risk tolerance before trading, and ensure any recommendation or solicitation is suitable (SFC VATP Guidelines June 2023, paras 9.4, 9.6, 9.20).

Except for institutional and qualified corporate professional investors, a licensed VATP must prominently disclose the nature and risks of virtual asset trading, and its client agreements must include the risk disclosure statements in Schedule 2 of the SFC VATP Guidelines (June 2023, para 9.26).

Tokens for retail trading on a licensed VATP must be eligible large-cap virtual assets included in at least two acceptable indices from two index providers (VATP Guidelines para 7.8); from 3 Nov 2025 the 12-month track record no longer applies to professional-investor offerings but still applies to retail (circular 25EC57).

A licensed VATP must have a token admission and review committee of senior management covering the key business line, compliance, risk management and IT functions, which reports to the board at least monthly (SFC VATP Guidelines June 2023, paras 7.3–7.5).

Except for institutional and qualified corporate professional investors, a licensed VATP must set a limit for each client so that the client's exposure to virtual assets is reasonable given the client's financial situation (SFC VATP Guidelines June 2023, para 9.7).

Standard licensing conditions require a licensed VATP to send the SFC monthly business reports within two weeks of month-end and an annual independent review report, the first within 18 months of licensing and later ones within four months of financial year-end (SFC Licensing Handbook, July 2025).

The Securities and Futures Commission (SFC) licenses and supervises virtual asset trading platforms under AMLO Part 5B and, for security tokens and tokenised securities, under the SFO (Cap. 571). Its circular of 2 November 2023 (23EC52) treats tokenised securities as traditional securities with a tokenisation wrapper and supersedes its 29 March 2019 Statement on Security Token Offerings.

The Hong Kong Monetary Authority (HKMA) supervises banks and stored value facility licensees and, since the Stablecoins Ordinance (Cap. 656) took effect on 1 August 2025, licenses and supervises fiat-referenced stablecoin issuers (first two licences effective 10 April 2026). It also runs the Fintech Supervisory Sandbox, launched in September 2016.

The Financial Services and the Treasury Bureau (FSTB) leads Hong Kong's virtual asset policy and legislative proposals: the Government issued the Policy Statement on Development of Virtual Assets in October 2022 and Policy Statement 2.0 ("LEAP" framework) on 26 June 2025, and the FSTB and SFC jointly consulted on VA dealer and custodian regimes from 27 June 2025.

Joint Financial Intelligence Unit (JFIU): A joint unit of the Hong Kong Police Force and the Customs and Excise Department responsible for receiving and analyzing suspicious transaction reports (STRs) and disseminating financial intelligence related to AML/CTF.

The SFC's Fintech Contact Point is a channel for fintech businesses that intend to conduct regulated or virtual asset-related activities in Hong Kong. Separately, the SFC Regulatory Sandbox, launched on 29 September 2017, gives qualified firms a confined regulatory environment to carry on SFO regulated activities under close SFC supervision, with licensing conditions that may limit client types or exposure.

The HKMA launched the Fintech Supervisory Sandbox (FSS) in September 2016; it lets banks and their partnering technology firms conduct pilot trials of fintech initiatives with a limited number of participating customers without having to achieve full compliance with the HKMA's supervisory requirements.

Hong Kong profits tax is charged on profits arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong; the normal rates are 16.5% for corporations and 15% for unincorporated businesses, with two-tiered rates from 2018/19 of 8.25% and 7.5% respectively on the first HK$2,000,000 of assessable profits.

Hong Kong has no capital gains tax: profits tax is charged only on profits arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong, excluding profits from the sale of capital assets. Gains on virtual assets are therefore taxable only where they arise from carrying on a trade or business; the IRD's DIPN No. 39 (March 2020) addresses profits tax on digital assets.

The Inland Revenue Department's Departmental Interpretation and Practice Notes No. 39, "Profits tax - Digital Economy, Electronic Commerce and Digital Assets" (March 2020), covers the profits tax treatment of digital assets. Profits tax excludes profits from the sale of capital assets, so the treatment of a virtual asset gain depends on whether it is held as trading stock in a business or as a capital asset.

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615, AMLO) is the primary legislation for virtual asset service providers in Hong Kong: Part 5B, added by the AMLO (Amendment) Ordinance 2022 (Ord. No. 15 of 2022) with effect from 1 June 2023, requires any person carrying on a business of providing a VA service to be licensed by the SFC (s.53ZRD), and SFC-licensed VASPs are subject to the SFC's AML/CFT Guideline for licensed corporations and SFC-licensed VASPs.

SFC-licensed VASPs must apply the travel rule (AMLO Sch. 2 s.13A; SFC AML/CFT Guideline paras 12.11.5–12.11.24, June 2023) to every virtual asset transfer: names and account numbers are required below HK$8,000, and fuller originator information and verification apply at HK$8,000 or more.

Under the SFC AML/CFT Guideline (June 2023) para 4.1.4 and AMLO Sch. 2, CDD requires identifying and verifying the customer from reliable independent sources, identifying the beneficial owner and taking reasonable measures to verify that owner's identity.

Under AMLO Sch. 2 s.5(1) and para 5.1 of the SFC AML/CFT Guideline (June 2023), an SFC-licensed VASP must continuously monitor each business relationship, keeping customer data up to date and scrutinising transactions for consistency with the customer profile.

A licensed VATP must keep specified business records for at least seven years (VATP Guidelines para 14.7), and CDD and transaction records for at least five years after the business relationship ends (SFC AML/CFT Guideline para 8.4; AMLO Sch. 2 s.20).

SFC-licensed VASPs must file suspicious transaction reports with the Joint Financial Intelligence Unit (JFIU), not the SFC, as soon as reasonable, under s.25A(1) of the DTROP and OSCO and s.12(1) of the UNATMO (SFC AML/CFT Guideline June 2023, para 7.1).

Part XI of the SFC VATP Guidelines (June 2023) makes senior management fully responsible for sound and compliant operations and requires an effective and independent compliance function (paras 11.1, 11.16); the AML/CFT Guideline Chapter 9 requires ongoing staff training.

SFC-licensed VASPs must screen customers and beneficial owners against current designation databases at onboarding and against new designations as soon as practicable, and screen parties to cross-border transfers before executing them (SFC AML/CFT Guideline June 2023, para 6.16).

Under the Stablecoins Ordinance passed on 21 May 2025 and in effect since 1 August 2025, only fiat-referenced stablecoins issued by an HKMA-licensed issuer may be offered to retail investors in Hong Kong, and only advertisements of licensed FRS issuance are allowed.

Under the AMLO transitional arrangements (Schedule 3G), VATPs operating in Hong Kong before 1 June 2023 could continue without breach until 31 May 2024; those that applied between 1 June 2023 and 29 February 2024 and met the deeming conditions were deemed licensed from 1 June 2024 pending determination, while the rest had to close down by 31 May 2024.

For contraventions of specified AMLO provisions, the SFC may publicly reprimand a licensed VASP, order remedial action, or impose a pecuniary penalty up to the greater of HK$10 million or three times the profit gained or cost avoided (AMLO ss.21 and 53ZSP; SFC AML/CFT Guideline para 1.27).

A licensed VATP must at all times maintain paid-up share capital of not less than HK$5,000,000, maintain liquid capital not below its required liquid capital, and hold liquid assets in Hong Kong equal to at least 12 months of operating expenses (VATP Guidelines June 2023, paras 6.1–6.3).

SFC-licensed VATPs must apply the AML/CFT Guideline's virtual-asset chapter (Chapter 12, June 2023), including screening virtual asset transactions and wallet addresses with tools such as blockchain analytics (para 12.7.3); separately, tokens offered to retail clients must be eligible large-cap virtual assets under para 7.8 of the VATP Guidelines.

A VATP applicant must be a company incorporated in Hong Kong or an overseas company registered with the Companies Registry, and must appoint at least two responsible officers, at least one ordinarily resident in Hong Kong and at least one an executive director (SFC Licensing Handbook for VATPs, July 2025, paras 3.2.1–3.2.5).

Under Part II of the SFC VATP Guidelines (June 2023), applicants must satisfy the SFC they are fit and proper, assessed under SFO s.129(1) and AMLO s.53ZRJ(1) on financial status or solvency, qualifications or experience, competence, and reputation, character, reliability and financial integrity.

Licensed VATPs may serve retail investors since the AMLO regime began on 1 June 2023, subject to retail safeguards such as large-cap token admission (VATP Guidelines para 7.8); licensing conditions require monthly reports to the SFC and an annual independent review report (Licensing Handbook, July 2025).

A VATP licence application must include written policies and procedures, evidence that a suitable external assessor has been identified with its capability statement, and a declaration that the board passed a resolution approving the application (SFC Licensing Handbook, July 2025, paras 6.2.2 and 6.3.1).

VATP licence applications are filed online through the SFC's WINGS-LIC system with responsible-officer applications lodged together, and the applicant must engage an external assessor to assess its policies, systems and controls (SFC Licensing Handbook, July 2025, paras 3.2.8, 3.2.23, 6.1–6.2).

The SFC sets no fixed processing time for VATP licence applications; it says timing varies with services offered, internal controls, application quality, capital injection and the number of applications it is processing (SFC Licensing Handbook for VATPs, July 2025, para 6.7.1).

AMLO (Cap. 615) Part 5B has been the basis of Hong Kong's mandatory SFC licensing regime for centralised virtual asset trading platforms since 1 June 2023. Licensing regimes for VA dealers and custodians (consultation concluded 24 Dec 2025) and for VA advisers and managers (concluded 26 May 2026) are proposed amendments to the AMLO, which the FSTB and SFC target introducing to the Legislative Council as a bill in 2026.

The Stablecoins Ordinance (Cap. 656) took effect on 1 August 2025: issuing fiat-referenced stablecoins in Hong Kong, or Hong Kong dollar-referenced ones in or outside Hong Kong, requires an HKMA licence, with requirements on reserve asset management, redemption and segregation of client assets, and an HKMA AML/CFT Guideline for licensed issuers. The HKMA received 36 applications and granted the first two licences, to Anchorpoint Financial Limited and HSBC, effective 10 April 2026.

The FSTB and SFC published consultation conclusions on VA dealer and custodian regimes on 24 December 2025 and on VA advisory and management regimes on 26 May 2026 (modelled on SFO Types 4 and 9), and target introducing the bill amending the AMLO (Cap. 615) into the Legislative Council in 2026.