Update: a digital-asset fund structured CIS

Digital-asset fund managers connecting the CIS corridor to Hong Kong face a compounding compliance position. Two overlapping licensing regimes now apply, and the gap between them is where enforcement risk concentrates.

A digital-asset fund structured through Hong Kong and the CIS must satisfy the Securities and Futures Commission's virtual-asset platform licensing requirements and, where the fund's interests constitute "securities" under the Securities and Futures Ordinance, a separate SFC authorisation layer. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance governs customer due diligence and the FATF travel rule (the international standard requiring originator and beneficiary data to accompany virtual-asset transfers above a defined threshold) for all regulated virtual-asset service providers. On the CIS side, the relevant national financial-intelligence and securities regulators each impose their own registration and AML requirements. The corridor is active; the compliance file must satisfy both ends.

This briefing sets out what changed, who is in scope, and what to do now.

What changed – and why the timing matters

Hong Kong's mandatory licensing regime for centralised virtual-asset trading platforms commenced on 1 June 2023 under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, with the Securities and Futures Commission as the licensing authority. That date set the clock. Platforms and structures that pre-dated the regime are not grandfathered indefinitely; they are subject to transition provisions that have since narrowed.

The second layer concerns fiat-referenced stablecoins. The Hong Kong Monetary Authority commenced a separate licensing regime for fiat-referenced stablecoin issuers in 2025. Where a CIS-side fund vehicle holds or distributes a fiat-referenced stablecoin, the Hong Kong Monetary Authority's perimeter may apply in addition to the SFC's. Parties should verify the current commencement date and perimeter before acting; the regime was live and being applied at the date of this briefing.

For CIS-based principals, the trigger is not abstract. Enforcement bodies in several CIS states have moved from guidance to formal investigation in cross-border digital-asset matters. A structure that looks clean in Hong Kong may carry an undisclosed exposure at the CIS node – in particular, where the fund's interests are distributed to CIS retail participants without the corresponding domestic filing.

Who is affected across the corridor

The scope is wider than most managers assume. The Hong Kong licensing perimeter covers centralised virtual-asset trading platforms – but the overlap with the Securities and Futures Ordinance means that a fund issuing tokenised interests may also need SFC authorisation for the interests themselves, not only for any trading platform it operates.

CIS-originated capital entering a Hong Kong-structured fund vehicle triggers customer due diligence requirements on the Hong Kong side. The travel rule applies to virtual-asset transfers above the applicable threshold: originator and beneficiary information must accompany the transfer. Where the CIS counterparty is a VASP (virtual-asset service provider) in its own jurisdiction, the travel-rule obligation runs in both directions. Gaps in the counterparty's own compliance programme create a liability for the Hong Kong-side operator.

AML exposure does not wait for a formal investigation. A source-of-funds file that cannot demonstrate the origin of CIS capital – across the correct chain of entities – is a gap that regulators on either side of the corridor can and do act upon.

Our desk regularly advises on cross-border digital-asset structures of this kind. In our experience, the most common gap is not the primary licensing analysis – most managers have that – but the second-order obligations: the travel-rule procedures, the correspondent VASP due diligence, and the treatment of stablecoin positions within the AML file.

For the compliance and AML position across this corridor, the governing instruments are the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Hong Kong), the Securities and Futures Ordinance (where the interests are securities), and the equivalent AML and securities-registration instruments in the relevant CIS jurisdiction. No single adviser sitting in one jurisdiction can sign off on both ends; a coordinated approach is required.

See our related matter note on a digital-asset fund structured through Hong Kong and our analysis of digital-asset fund structures through Hong Kong and the BVI for the structural and enforcement angles. For the broader Tech & Web3 practice, see our practice page.

Immediate action

Three steps apply now. First, confirm whether the fund vehicle or its operator requires licensing under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the Securities and Futures Ordinance, or both. The trigger is the nature of the activity and the asset, not the label the manager applies to itself. Second, audit the AML file for travel-rule compliance on both the Hong Kong and CIS legs. Third, obtain a current analysis of the CIS-side registration and AML position; the applicable rules in several CIS states have changed materially in the past 24 months, and a reading from 2022 or 2023 is unlikely to reflect the current position.

The sequence above describes the standard compliance checklist. Your position turns on the documents, the jurisdictions engaged, and the chain of entities – which is where the exposure is won or lost.

For a structured assessment of your digital-asset fund's licensing and AML position across Hong Kong and the CIS, write to us at info@lockhartyip.com.

Frequently asked questions

How long does a digital-asset fund structured through Hong Kong and the CIS usually take?

Timeline depends on the structure's existing licensing and AML position. Where no prior SFC engagement has taken place, the licensing process under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance can be a multi-month sequence; the CIS-side registration adds a parallel track. A structure with existing filings at both ends moves materially faster than one being built from scratch. Parties should map the critical path before committing to an investor timeline.

What does the route look like for a digital-asset fund structured through Hong Kong and the CIS?

The route runs in two parallel tracks. The Hong Kong track covers entity formation or confirmation, the SFC licensing assessment, and the AML-programme build under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The CIS track covers securities or fund registration in the relevant state and the corresponding AML filing. The two tracks must close simultaneously; a fund that is compliant in Hong Kong but unregistered on the CIS side carries a live enforcement risk at the distribution point.

What documents are needed for a digital-asset fund structured through Hong Kong and the CIS?

Core documents span the fund's constitutional documents, the whitepaper or offering memorandum, the AML and know-your-customer procedures, source-of-funds documentation for CIS investors, and the travel-rule compliance procedures. The SFC will require evidence of the responsible officer's fitness and the platform's technical and operational controls. The CIS-side regulator will have its own submission requirements, which vary by state and asset class. Both sets of documents must be consistent with each other.

Speak with Lockhart & Yip

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.

Update: a digital-asset fund structured through Hong Kong and the CIS

What changed – and why the timing matters

Who is affected across the corridor

Immediate action

Frequently asked questions

Speak with Lockhart & Yip

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