Hong Kong Crypto Licensing Update 2026: VASP Regime Matures as Asia's Crypto Hub Strategy Advances

Hong Kong's virtual asset service provider (VASP) licensing framework, administered by the Securities and Futures Commission (SFC), has now granted licences to over 30 crypto exchanges — a significant scaling of the regime that launched with just two licensed operators (HashKey Exchange and OSL) in mid-2023.

The maturation of Hong Kong's licensing regime represents the most developed regulatory framework for digital assets in Asia, and reflects the city's deliberate strategy to position itself as a leading global crypto and Web3 hub following mainland China's 2021 crypto ban.

Who Is Licensed

Beyond the original HashKey Exchange and OSL, the SFC has granted provisional approvals and full licences to a growing list of global and regional exchanges. The list now includes several international names including Bullish, Bybit, OKX (via its HK subsidiary), and Gate.io HK — representing a significant expansion of the licenced operator base since the framework's launch.

Each licenced VASP must meet requirements including minimum liquid capital (HK$5 million), segregated client asset custody, cybersecurity standards, AML/KYC programmes aligned with FATF guidelines, and — for exchanges serving retail investors — a mandatory product eligibility assessment and suitability requirements for clients.

Retail Access Expansion

A key development in the Hong Kong regime has been the extension of licences to cover retail investor access. Initially, licensed exchanges could only serve professional investors (individuals with HK$8 million or more in investable assets). The SFC has progressively expanded retail access requirements, including mandatory knowledge assessments, risk disclosure requirements, and a list of eligible virtual assets (currently limited to large-cap tokens meeting defined liquidity and market cap thresholds).

The eligible virtual assets list currently includes Bitcoin, Ethereum, and a small number of additional tokens. Altcoins and DeFi tokens that do not meet the SFC's eligibility criteria may be traded on licensed platforms only by professional investors.

DeFi and Web3 in Hong Kong

Hong Kong has been more cautious about the DeFi sector than about centralised exchange regulation. The SFC has not provided specific guidance on whether operating a DeFi protocol constitutes regulated activity under the VASP framework — a gap that creates uncertainty for DeFi businesses considering Hong Kong as a base.

The city has, however, actively cultivated Web3 infrastructure including the Cyberport hub, HKMA-backed Central Bank Digital Currency (e-HKD) pilots, and government-issued tokenised green bonds (the world's first government-issued tokenised bond, placing HK$800 million in February 2023 and repeated in subsequent years).

Several DeFi-adjacent businesses — wallet providers, DeFi infrastructure companies, and protocol foundations — have established Hong Kong entities, attracted by the city's common law framework, existing financial services infrastructure, and proximity to Asian capital markets. The SFC has indicated it will provide further DeFi-specific guidance in the second half of 2026.