The SFC of the Hong Kong Securities Regulatory Commission released a roadmap for virtual asset supervision. What are the key points?

Authors of this article: Iris, Bai Qin, Huang Wenying

On February 19, 2025, the Hong Kong Securities Regulatory Commission (SFC) released the latest regulatory roadmap "ASPI-Re" for the virtual asset market, aiming to further improve the supervision of the virtual asset market, introduce more types of virtual asset products and functions, and balance it. Innovation and risk management in Hong Kong's Web3 industry.

The roadmap proposes that the Hong Kong Securities Regulatory Commission will next pass five pillars, namely market access, security guarantees, product innovation, infrastructure construction, and relationship management, as well as 12 This action includes but is not limited to optimizing the license system, promoting OTC and custody services supervision, research allowing professional investors to trade derivatives and staking, and building Hong Kong into a compliant and trustworthy virtual asset flow center.

For lawyer Mankun, the release of this regulatory roadmap also means that the compliance direction and path of Hong Kong's Web3 project entrepreneurship are becoming clearer. Therefore, in this article, lawyer Mankun first summarizes the roadmap, refines key regulatory directions and relevant compliance matters for Web3 projects to enter Hong Kong for practitioners to understand.

Pillar A: Expand the scope of access

In 2024, the Hong Kong Securities Regulatory Commission officially implemented the virtual asset trading platform (VATP) licensing system, and multiple virtual asset trading platforms in the Hong Kong virtual asset market have been approved for operation.

However, there are still barriers to access in the market, especially over-the-counter trading ( OTC ) and custodial services have not yet been included in the regulatory framework, which not only affects the integrity of the market structure, but also limits investors' trading options. To this end, SFC proposed to establish an independent licensing system for OTC transactions and custodial services under Pillar A, so that non-VATP services can operate under the compliance framework. OTC trading is crucial for bulk trading, and custodians are the key link in ensuring asset security. The new license system will fill the market gap and enhance the security and transparency of the Hong Kong market.

At the same time, the Hong Kong virtual asset market cannot rely solely on local virtual asset trading platforms. Such as liquidity providers (LPs) and global virtual asset trading platforms can also bring fresh blood to Hong Kong's virtual asset market. Therefore, the Hong Kong Securities Regulatory Commission also plans to appropriately lower the threshold in 2025, and introduce this type of provider in compliance, so that local investors can access a wider global trading order book, while reducing transaction costs and improving market liquidity.

For Web3 companies, the launch of Pillar A means a change in the market entry threshold . Companies planning to provide OTC transactions or custody services in Hong Kong need to pay close attention to new licensing requirements, and licensed trading platforms will also face greater competitive pressure from international platforms. At the same time, the opening of global liquidity will make Hong Kong a more attractive virtual asset center, but it also puts higher requirements on corporate compliance capabilities.

Pillar S: Optimize Compliance Requirements

At the end of 2024, the Hong Kong Securities Regulatory Commission summarized the licensing process and results of that year, believing that it is necessary to optimize the compliance process and improve the licensing rate while ensuring market safety. At the same time, the global regulatory environment is evolving, and overly strict compliance requirements may reduce the attractiveness of the Hong Kong market and hinder the entry of global liquidity.

Therefore, under Pillar S , SFC proposed a series of adjustment plans to optimize custody, storage ratio, insurance compensation mechanism and investor access rules to ensure that while maintaining market security, unnecessary compliance costs are reduced and market-oriented Competitiveness.

For example, the current custody requirements and cold storage ratio in Hong Kong are too rigid, which may lead to VASPs facing liquidity management difficulties during periods of high transaction volume. In the next adjustments, SFC plans to allow trading platforms to choose custody methods and optimize the ratio of hot and cold storage according to their own risk management strategies, and at the same time, it is supplemented by independent auditing, real-time monitoring and other mechanisms to ensure the safety of funds while improving operational efficiency. In addition, mandatory insurance and compensation mechanisms will also be more flexible. In the future, VASPs will be able to choose appropriate insurance plans based on their own business models, rather than a one-size-fits-all unified standard.

In terms of investor access, SFC plans to enable Web3 companies to clarify their compliance paths when they are product issuance and market access through a clearer product classification framework. For example, different types of virtual assets such as securities tokens, stablecoins, RWA (real-world asset tokenization) may be applicable to different regulatory requirements to reduce compliance uncertainty and ensure market transparency for investors.

For Web3 companies, the adjustment of Pillar S means a reduction in compliance costs, but it also puts forward higher technical and risk control requirements. Trading platforms and custodians need to adjust their storage and security strategies according to the new regulatory framework, while project parties planning to enter the Hong Kong market need to more clearly position the regulatory attributes of their products to ensure compliance operations.

Pillar P: Extend product range

Currently, the Hong Kong virtual asset trading market mainly revolves around the spot market. At the same time, taking HashKey Exchange, the largest licensed exchange in Hong Kong as an example, only a few mainstream currencies (such as BTC and ETH) are currently available, and the overall product diversity of the market is low. Compared with the global market, Hong Kong's trading ecosystem still has a lot of room for expansion, especially in financial instruments such as derivatives, staking, lending, and structured products .

Therefore, the proposal of Pillar P means that the Hong Kong Securities Regulatory Commission plans to expand a wider range of tradable products under the compliance framework to meet the demands of professional investors for risk management tools and market depth. The core idea of ​​the regulatory authorities is not to fully liberalize it, but to open up some high-risk products to professional investors (PIs) under the Investor Suitability Principle ), and at the same time strengthen transparency and market supervision.

First, the SFC program allows professional investors to trade new tokens and virtual asset derivatives. The listing of new tokens will be based on stricter due diligence and information disclosure requirements to ensure that tokens that meet standards can enter the market for transactions. At the same time, the Hong Kong Securities and Exchange Commission will also study the regulatory framework of virtual asset derivatives to support professional investors in hedging, arbitrage and risk management.

In addition to the expansion of trading products, the Hong Kong Securities Regulatory Commission also proposed to explore a compliance framework for pledge and lending business under Pillar P. At present, pledge and lending business in the global market has become the mainstream virtual asset investment strategy, but Hong Kong's supervision of these services is still in a gray area. In the future, SFC is expected to allow regulated trading platforms to provide pledge and lending services, but may require them to meet specific custody, risk management and information disclosure standards.

The implementation of this series of measures means that the product types in the Hong Kong market will move closer to international standards, but it also requires Web3 companies to invest more resources in compliance and risk control. For project parties that plan to provide qualifying or lending services in Hong Kong, establishing a safe asset custody mechanism and a transparent income distribution model may become a key element of compliance.

Pillar I: Enhance regulatory capabilities

There were various airdrop fishing incidents before, and later the president recommended MEME coins suspected of insider trading. The Web3 market has never lacked market manipulation, fraudulent transactions, money laundering and other issues. However, at present, SFC or regulators in most countries and regions mainly rely on event triggering, that is, they will take action only if security incidents occur. This post-event regulatory model obviously has obvious lag, and it is difficult to effectively prevent market manipulation or fraudulent transactions.

Therefore, under Pillar I, SFC plans to optimize regulatory reporting mechanisms and introduce data-driven monitoring tools through new technology tools and infrastructure construction to enhance regulatory capabilities on the market. The SFC proposed to study ways to directly report digital asset information and explore various data-driven monitoring tools, including transaction monitoring, blockchain intelligence, wallet tracking, etc., to identify fraud, financial crimes and market misconduct earlier.

At the same time, the SFC plans to strengthen cross-institutional cooperation , including but not limited to cooperation with the Hong Kong police, the Hong Kong Monetary Authority (HKMA), the International Securities Regulatory Organization (IOSCO) and other institutions to jointly combat market manipulation and illegal transactions.

For Web3 enterprises, especially virtual asset trading platforms, Pillar I's regulatory upgrade means stricter data reporting obligations and higher transaction transparency requirements. Therefore, enterprises need to strengthen compliance management and risk control systems to ensure compliance with future regulatory standards, especially in transaction data reporting, asset flow monitoring and anti-money laundering compliance.

Pillar Re: Market Education Popularization

The complexity and high risk of the virtual asset market make investor education and industry transparency an issue that cannot be ignored. Pillar Re in the roadmap focuses on Web3 market education, industry communication and regulatory transparency , aiming to help investors better understand the market and promote interaction between Web3 companies and regulators.

One of the measures worth noting is that the Hong Kong Securities and Exchange Commission plans to establish a regulatory framework for Finfluencers (financial bloggers) . In recent years, social media has been flooded with a lot of investment advice on virtual assets. Some KOLs (opinion leaders) have influenced investor decision-making through misleading publicity, and even a few KOLs have become part of the scam. Therefore, the SFC program ensures that investors can better understand virtual asset investment and protect their own interests by promoting responsible behavior and accountability of financial influencers. Once this measure is implemented, it may mean that the marketing compliance requirements in the Hong Kong market will be stricter, and KOLs and social media publicity will be regulated to higher standards.

In addition to the initiatives targeting KOLs, regulators also plan to launch an investor education program to improve the awareness of market participants and reduce investment risks. In addition, Pillar Re also emphasizes the establishment of an industry exchange platform to improve policy transparency. The Hong Kong Securities and Exchange Commission plans to strengthen communication with Web3 companies through the Virtual Assets Advisory Group (VACP) , so that market participants can have a more direct understanding of regulatory policies and provide feedback during the policy formulation process. In this way, Web3 companies will be able to use the official industry exchange platform to establish closer communication with regulators to ensure business compliance and sustainability.

Summary of Lawyer Mankun

The "ASPI-Re" roadmap released by the Hong Kong Securities Regulatory Commission (SFC) this time is undoubtedly an important milestone in the compliance process of Hong Kong's virtual asset market. Judging from the five pillars and 12 measures, SFC is trying to find a balance between risk control and market development. For Web3 companies, the introduction of this series of new regulations not only means that the compliance threshold in the Hong Kong market is clearer, but also means that compliance costs, market competition and regulatory requirements will be fully upgraded.

As a Web3 lawyer who has been paying attention to the supervision of Hong Kong's virtual asset market for a long time, Lawyer Mankun has always maintained close communication with Hong Kong regulatory agencies and has deeply participated in the license application, business compliance and regulatory adaptation of Web3 companies in Hong Kong. Faced with the upcoming SFC regulatory upgrade, lawyer Mankun will pay close attention and develop compliance solutions from it to optimize it under the compliance framework for virtual asset trading platforms, crypto funds, Web3 startups and cross-border business teams. Business architecture to improve market adaptability.

As a Web3 lawyer who has long been concerned about Hong Kong's virtual asset supervision, Mankun lawyer has always maintained close communication with SFC and has deeply participated in the license application and commercial compliance adaptation of Hong Kong Web3 companies. Faced with this regulatory upgrade, lawyer Mankun closely monitors policy changes and helps teams such as trading platforms, crypto funds, start-ups and cross-border businesses to optimize business structure within the compliance framework and improve market adaptability.