In one sentence
Hong Kong is building an end-to-end licensed regime for crypto: trading platforms, cryptocurrencies, OTC, custody — each stage needs its own licence.
VATP licensing
- Regulator: SFC.
- Legal basis: SFO + AMLO.
- Licensed: HashKey Exchange, OSL (more in queue).
- Retail can trade major tokens (BTC, ETH) on licensed venues.
Cryptocurrency Bill
- Regulator: HKMA.
- Scope: HKD / fiat-pegged cryptocurrency issuers.
- Requirements: 1:1 high-quality liquid reserves, redemption rights, disclosure, KYC.
- Impact: licensed HKD cryptocurrencies on the way.
OTC regulation
- Customs MSO regime is being extended with crypto-specific clauses (rolling out 2025).
- Licensed OTC must implement KYC, KYT, AML, STR reporting.
- Receipts, on-chain TXID and source-of-funds kept ≥ 7 years.
Custody
- VATPs must keep ≥ 98% of client assets in cold storage.
- Independent custodians will also need a licence.
Cross-border cooperation
- HK regulators coordinate with the mainland, Singapore and the UAE on OTC, AML and asset tracing.
- Mainland residents using HK rails still face restrictions — see cross-border fund compliance.
What this means for users
- Trading on licensed venues = legal protection of assets.
- Receipts from licensed shops are strong evidence when banks query source of funds.
- Large trades (≥ HK$120k equivalent) require a source-of-funds declaration.
Action checklist
- Only deal with licensed, verifiable counterparties.
- Keep KYC docs, receipts and TXIDs.
- Read AML / KYC explained before large trades.
Accurate as of April 2025; rules may evolve. Always cross-check the SFC, HKMA and Customs websites.
