Self-custodial wallet / non-custodial software in Hong Kong
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is permitted in Hong Kong with no licensing burden.
Verdict Details
- Permitted
- yes
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
Key Restrictions
- Must not hold, control, or have access to user private keys or funds — otherwise custody classification and VATP licensing would trigger.
- Software publisher must not offer any custodial, exchange, or wallet management services alongside the software, to avoid crossing into VASP activity.
Key Risks
- Regulatory boundary risk: if software is bundled with any custodial or transaction-relay service (e.g. integrated swap feature routed through the publisher's infrastructure), SFC could reclassify the operator as a VATP.
- Consumer-protection liability: HK common law could impose duties on software publishers if users suffer losses due to software defects, without clear statutory safe harbour.
- Future regulatory expansion: SFC has signalled broader regulation of OTC desks and could extend the VATP definition to cover wallet software or non-custodial providers.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
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
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.
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.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Yes — publishing non-custodial/self-custodial wallet software does not trigger VATP licensing or AML obligations in Hong Kong, because the VATP regime (AMLO Part 5B) applies only to operators who control or hold client assets, which a pure software publisher does not.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?