Update: a virtual-asset trading platform licence in Hong Kong

The mandatory licensing regime for centralised virtual-asset trading platforms (VATPs, meaning centralised exchanges and similar platforms that allow clients to trade virtual assets) is now a live enforcement reality in Hong Kong. The Securities and Futures Commission (SFC) is the licensing authority. The regime commenced on 1 June 2023 under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). Any platform operating without a licence, or without having lodged a compliant application under the transitional provisions, faces enforcement exposure today.

A virtual-asset trading platform operating in or targeting Hong Kong investors must hold an SFC licence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and where any listed virtual asset constitutes a security or futures contract, additional authorisation under the Securities and Futures Ordinance is required alongside it.

This briefing covers three things: what the regime requires, who across the cross-border corridor is affected, and what the immediate action is.

What the regime requires and what has changed

The VATP licensing regime places centralised virtual-asset trading platforms under a mandatory regulatory perimeter. Operating without a licence is an offence. The SFC administers the regime and sets the conduct, financial, and AML standards that a licensed platform must meet.

The regime sits alongside, not instead of, the existing securities framework. Where a virtual asset is a "security" or "futures contract" under the Securities and Futures Ordinance, the platform requires SFC authorisation under that Ordinance as well. Both regimes apply concurrently in those cases. Platforms that assumed only one filing was needed have, in our cross-border practice, consistently underestimated this dual exposure.

On the AML side, licensed VATPs are subject to customer due diligence obligations and the FATF travel rule (the Financial Action Task Force requirement that originator and beneficiary information accompany virtual-asset transfers above defined thresholds). This is not optional compliance. It is a licence condition, and the SFC actively reviews it on inspection.

A separate licensing regime for fiat-referenced stablecoin issuers (issuers of stablecoins pegged to a fiat currency, such as a Hong Kong dollar or US dollar-referenced token) is administered by the Hong Kong Monetary Authority and commenced in 2025. Parties should verify the current commencement date, transitional position, and perimeter with counsel before acting, as the rules are still settling.

For a broader read on how technology and Web3 entities are structured through Hong Kong, see our Tech & Web3 practice page.

The sequence above describes the standard licensing position. Your matter turns on the specific virtual assets offered, the jurisdictions from which clients are onboarded, and whether any asset crosses the securities perimeter – which is where the filing strategy is won or lost.

To assess your platform's licensing exposure across the AMLO and SFO perimeters, write to us at info@lockhartyip.com.

Who is affected across the cross-border corridor

The reach of the regime extends well beyond platforms physically based in Hong Kong. Any platform that actively markets to Hong Kong investors, or that operates infrastructure that makes services accessible to them, is within scope. This catches groups operating from the Mainland, Singapore, the UAE, and European jurisdictions that have built Hong Kong client books without obtaining a licence.

Groups structured with a BVI or Cayman holding entity above a Hong Kong operating entity face a particular question. The operating entity may independently trigger the licensing requirement regardless of where the group holding sits. Offshore holding does not neutralise the regulatory perimeter at the operating level.

Founders and compliance officers of platforms that are not yet licensed, or that entered the transitional period without completing the required steps, should treat the position as an open enforcement risk now. The SFC has made clear that the transition period is not a grace period for inaction. In-house teams that have relied on non-Hong Kong legal opinions to assess Hong Kong licensing obligations have, in our experience, found those opinions do not address the AMLO perimeter correctly.

For technology groups expanding into Asia more broadly and assessing regulatory obligations across multiple venues, the cross-border structuring considerations are set out in our analysis on IP licensing for technology groups expanding into Asia. For SaaS and data agreements with cross-border exposure, see our briefing on cross-border SaaS and data agreements touching the UAE.

What to do now

The immediate steps are sequential and time-sensitive. First, determine whether the platform falls within the AMLO VATP perimeter, the SFO securities perimeter, or both. Second, assess whether any transitional filing was lodged and whether it remains valid. Third, review the AML and travel-rule compliance programme against SFC inspection expectations.

If an earlier filing or compliance assessment produced an inconclusive or stalled result, a second read can identify the structural error and the routes still open.

For a preliminary read on your platform's licensing and AML position across the relevant Hong Kong regimes, email info@lockhartyip.com.

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

Related

• Tech Web3
• Ip Licensing Technology Group Expanding Into Asia Analysis
• Cross Border Saas Or Data Agreement Touching Uae 3

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