Hong Kong crypto license
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Hong Kong has become a leading destination for cryptocurrency businesses and exchanges seeking a clear and reliable framework. Getting a crypto license in Hong Kong means meeting strict requirements set by local regulators, including the Securities and Futures Commission. These rules cover everything from anti-money laundering controls to ensuring secure custody of digital assets. On this page, you will find a simple overview of the main requirements, key steps, and benefits for companies interested in a Hong Kong crypto license.
Hong Kong crypto license: A practical overview for businesses
Hong Kong has positioned itself at the forefront of the digital asset industry, aiming to become Asia’s premier hub for virtual assets. Its business-friendly policies, leading financial infrastructure, and strong links to the global market make it especially attractive for cryptocurrency companies. The government has introduced clear regulations that balance market growth and investor protection. This clarity is a key advantage for international companies and startups looking for long-term certainty.
The basics: Who needs a license?
If you operate a crypto exchange, stablecoin business, wallet service, OTC desk, or provide custodian services for virtual assets in Hong Kong, or even if you actively market your services to Hong Kong investors, you must obtain a license. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) are the primary regulators, with the Customs and Excise Department handling Money Service Operator (MSO) licenses for fiat-crypto services.
Key regulators
Securities and Futures Commission (SFC)
Regulates and licenses virtual asset trading platforms and certain tokenized financial products.
Hong Kong Monetary Authority (HKMA)
Oversees stablecoin issuers and provides guidelines for custodians and banks working with digital assets.
Customs and Excise Department (C&ED)
Licenses MSOs, covering businesses involved in fiat-to-crypto or cross-border remittance activities.
Main license types
Virtual Asset Trading Platform (VATP) license
For centralized trading platforms, covering the core exchange business and retail/institutional investors.
Stablecoin Issuer license
Required for stablecoin businesses as of August 2025.
Money Service Operator (MSO) license
Needed for businesses that facilitate fiat-to-crypto, over-the-counter (OTC) trading, or remittance services.
Custodian wallet service license
For firms holding or safeguarding client digital assets.
Requirements for a crypto license
To ensure only credible operators enter the market, Hong Kong has set out clear eligibility criteria and operational standards:
Incorporation
The applicant must be incorporated in Hong Kong or registered as an overseas company.
Pre-approved tokens
Only high-liquidity virtual assets officially approved by the SFC may be listed or traded.
Qualified staff
The platform must appoint responsible officers deemed “fit and proper” by the SFC.
Financial resources
Adequate paid-up share capital and liquid assets are required.
AML/KYC compliance
Strong anti-money laundering (AML), know-your-customer (KYC), and sanctions screening procedures.
Regular audits
Platforms need robust IT security, ongoing transaction monitoring, and frequent independent audits.
Custody arrangements
Client assets must be strictly segregated from company funds; technical and operational controls must be in place to prevent loss or misappropriation.
Annual return filings
Licensees have to submit returns and comply with ongoing reporting obligations.
Application process and challenges
The licensing process is thorough. Applications that are incomplete or raise unresolved concerns can be returned or refused. Only a minority of applicants secure approval on their first attempt.
Application review
The SFC and HKMA will assess the business plan, technical infrastructure, compliance setup, and responsible officers’ suitability.
Fit and proper test
Directors and key management must pass background checks and demonstrate a strong track record.
Testing and third-party assessment
Vulnerability assessments and penetration tests by independent cybersecurity firms are required.
Demonstrate readiness
Applicants may be initially allowed to operate on a limited basis, pending further scrutiny and system validation.
If an application is refused or withdrawn, the company’s name is removed from the public register. Applicants should be prepared for a process that is transparent but not guaranteed.
Operational obligations
Once licensed, firms must comply with strict ongoing requirements:
Continuous compliance
Maintain AML/KYC frameworks, update policies as risks evolve, and train staff regularly.
Token management
Only list or trade SFC-approved tokens and report any changes in business scope.
Incident reporting
Mandated disclosure of cybersecurity breaches or operational disruptions.
Audit requirements
Regular internal and external audits to ensure system integrity and compliance.
Customer protection
Investors’ funds must remain segregated, and clear disclosures on risk must be made.
Advantages of being licensed in Hong Kong
Global credibility
A license from a respected global financial center, boosting trust with investors and partners.
Regulatory clarity
Predictable, transparent, and internationally aligned rules.
Access to capital
Easier access to venture funds, institutional partners, and mainstream banking.
No capital gains tax
There’s no capital gains tax on virtual assets for individuals. However, active traders may be subject to income tax.
Gateway to Asia
Hong Kong serves as a strategic launchpad for expanding into Asian and international markets.
Special rules: Stablecoins and tokenized products
From August 2025, companies issuing fiat-referenced stablecoins need a dedicated license from the HKMA. There are transitional provisions for existing issuers and strict expectations for operational resilience and investor protection.
If your business involves tokenized financial products such as digital bonds, tokenized gold, or structured notes, you will need to comply with additional requirements centered on smart contract reliability and risk management.
Innovation support: Fintech sandbox
Hong Kong’s regulators encourage innovation. The HKMA Fintech Supervisory Sandbox allows startups and established firms to test new products — such as digital asset payment solutions or wallets — in a controlled environment before full market launch. This “safe space” is ideal for piloting novel ideas while ensuring early regulatory engagement.
What to watch out for
Application withdrawals
Major platforms have exited the process when requirements proved too stringent.
Unapproved tokens
Exchanges are limited to trading SFC-approved tokens, which may constrain product offerings.
Regulatory changes
Hong Kong regularly updates its rules to maintain leadership but this can require ongoing adjustment by businesses.
How Legarithm can help
Securing a crypto or stablecoin license in Hong Kong is complex but achievable with the right approach. At Legarithm, we guide clients through every stage — from initial structuring and application, to compliance setup and operational launch. Our team monitors regulatory developments and works closely with authorities to help your business stay ahead and compliant in this fast-moving industry.
If you’re considering launching or expanding your digital asset business in Hong Kong, reach out to our team for tailored, practical advice and end-to-end support.
Frequently Asked Questions About Hong Kong Crypto License
What is a Hong Kong crypto license and who needs it?
A Hong Kong crypto license allows virtual asset trading platforms (VATPs) to legally operate and offer their services to investors in Hong Kong. All exchanges—whether based in Hong Kong or marketing to Hong Kong residents—must have a license from the Securities and Futures Commission (SFC). This rule has been mandatory since June 1, 2023.
What are the main requirements for getting a crypto exchange license in Hong Kong?
To get a license, your exchange must be incorporated in Hong Kong or registered as an overseas company locally. You must have SFC-approved Responsible Officers, enough share capital and liquid assets, strict anti-money laundering (AML) and know-your-customer (KYC) controls, secure asset custody, and pass independent security audits. Only tokens approved by the SFC can be listed.
Which government bodies regulate the crypto industry in Hong Kong?
Three main regulators are involved:
- The Securities and Futures Commission (SFC) licenses crypto exchanges.
- The Hong Kong Monetary Authority (HKMA) oversees stablecoin issuers and digital asset custody.
- The Customs and Excise Department (C&ED) issues Money Service Operator (MSO) licenses for fiat-to-crypto services.
Do Hong Kong crypto exchanges pay corporate tax or capital gains tax?
There is no capital gains tax on crypto transactions in Hong Kong. Corporate tax may apply if the exchange makes profits from carrying on a business in Hong Kong. Individuals or companies trading crypto as a business may face income tax on their profits.
What is required to list cryptocurrency tokens on a licensed Hong Kong exchange?
Exchanges may only list SFC-approved tokens. Typically, these are high-liquidity coins with established reputations. Platforms must assess each token for legal compliance, transparency, and suitability. They must also maintain records showing due diligence on each token.
Are stablecoin issuers regulated in Hong Kong?
Yes. From August 1, 2025, all stablecoin issuers must have a license from the HKMA. They need to follow sector-specific AML policies, operational standards, and report to the regulator. There are no licensed stablecoin issuers as of June 2025.
What is an MSO license and when is it needed for crypto businesses?
A Money Service Operator (MSO) license is required for businesses involved in fiat-to-crypto exchange, remittances, OTC trades, or connecting crypto with fiat currencies. It is issued by the Customs and Excise Department (C&ED) and covers both online and cross-border services.
How long does it take to get a crypto license in Hong Kong?
The application process can take several months. It depends on how complete your documents are, the complexity of your business, and the regulator’s review timeline. Many applications are returned or refused due to missing requirements or not meeting regulatory standards.
What ongoing compliance obligations do licensed exchanges have?
Exchanges must regularly file annual returns, update compliance policies, conduct audits, perform security assessments, monitor transactions, and keep up with AML/KYC rules. They must also protect client assets with robust custody solutions and respond to regulatory updates.
What are the benefits of holding a Hong Kong crypto license?
A Hong Kong crypto license enhances your reputation with investors and partners. It provides access to global and Asian markets, with a clear legal structure and no capital gains tax. Licensed status also signals trust and operational quality to clients and regulators.
Types of Licenses and Regulated Activities
| License Type | Primary Activities Regulated | Key Regulator |
|---|---|---|
| VATP License (Virtual Asset Trading Platform) | Crypto spot exchanges, matched principal trading, market-making | SFC |
| Money Service Operator (MSO) | Fiat-to-crypto/cash exchange, remittances, OTC desks | C&ED |
| Stablecoin Issuer License (2025+) | Issuance of fiat-referenced stablecoins | HKMA |
| Securities Dealer/Advisor License | Tokenized financial products, investment advisory, dealing in security tokens | SFC |
Advantages of Obtaining a Crypto License in Hong Kong
| Advantage | Description |
|---|---|
| Regulatory Certainty | Transparent rules, well-defined process |
| No Capital Gains Tax | On virtual assets for individuals |
| Business-Friendly Ecosystem | Efficient setup procedures, infrastructure, gateway to Asia-Pacific |
| Reputation & Institutional Access | Increases trust among investors, opens doors to capital and partnership networks |
| International Market Access | Easier expansion to regional and global clients |
| Supportive Government Policies | Direct engagement with regulators, innovation sandboxes, dynamic fintech support |
