What Hong Kong’s Planned Crypto License for OTC Dealers Means for You

If your company buys and sells crypto for clients over the counter in Hong Kong, a new crypto license is coming for you. On 24 December 2025, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) said how they will license virtual asset dealers. They aim to send the bill to the Legislative Council (LegCo) in 2026.

One point in the paper matters most. Existing dealers will not get a "deeming arrangement". That means no temporary licence while your application is checked.

What an OTC desk is, and why it was outside the rules

An OTC desk, or over-the-counter desk, trades crypto directly with a client. There is no public order book. A client wants to sell bitcoin for Hong Kong dollars, and the desk quotes a price and settles the trade.

Since 2023, the SFC has licensed virtual asset trading platforms. Those are exchanges that match many buyers and sellers. A desk that trades ordinary crypto directly with each client was generally not covered by that licence. Crypto that counts as a security is a different case, already covered by securities rules. Many desks worked under a Money Service Operator (MSO) licence from the Customs and Excise Department instead. That licence covers money changing and remittance. It was never built for crypto dealing.

The new regime closes that gap.

What the new crypto license will cover

The government’s conclusions describe two new licences.

The first is for virtual asset dealing. The FSTB paper says the scope will be revised "to align with the scope of Type 1 regulated activity". Type 1 is the licence for dealing in securities. So a crypto dealer will be treated much like a securities dealer.

The second is for virtual asset custody. The SFC said this regime will focus on the risk of keeping clients’ private keys safe. A private key is the secret code that controls a crypto wallet. If you hold keys for clients, you will need this licence.

Some firms will need both. A desk that trades for clients and also keeps their coins overnight is doing both jobs.

Three desks, three different answers

It helps to test the rules against real business models. Here are three common ones.

A desk that quotes a price, takes the client’s Hong Kong dollars and sends the coins to the client’s own wallet the same day is dealing. It does not hold keys for the client. It will most likely need the dealing licence and nothing more.

A desk that trades for clients and then keeps their coins in wallets it controls is dealing and holding keys. It will most likely need both licences. It could also move custody to a firm that holds the custody licence, and keep only the dealing one.

A firm that only changes Hong Kong dollars into US dollars, and never touches crypto, is not a crypto dealer at all. The MSO licence is still the one that applies to it.

These are general cases. Your own activity map, the first step below, decides which one you are.

No deeming arrangement: the part that changes your plans

When the SFC licensed trading platforms in 2023, existing platforms had time to apply while they kept running. This time the FSTB says it does "not plan to grant a deeming arrangement to existing VA dealing service providers". The custodian paper says the same for custodians.

The same paper says "the licensing regime will take full effect on the commencement date". It calls this a "hard" commencement date. In plain terms, existing desks will not be treated as licensed while their applications are checked. A desk that is not licensed when the regime starts would have to stop that dealing.

The government also says it will choose a start date that gives the market time to adjust. So there should be a gap between the law passing and the regime starting. Use that gap. The date is not known yet. The government has said only that the bill should go to LegCo in 2026, and no bill had been introduced by late September 2026.

What we do not know yet

Several details are not published in final form. Be careful with any guide that states them as fact.

• The start date. It will be set by the bill or by a later notice.
• The exact capital figures. The consultation papers discuss them. The final numbers will be in the law and the SFC’s rules.
• The fee and the processing time. The SFC has not published a service time for these new licences.

If an adviser gives you a firm number for any of these today, ask them where it comes from.

Five things to prepare now

You cannot apply until the SFC opens applications under the new law. You can build most of the file now, because the dealing rules are set to follow the Type 1 model.

1. Map your activities. Write down every service you offer. Do you only quote and trade? Do you hold client coins or keys? Do you offer credit? Each answer points to a different licence.
2. Pick your responsible officers. A Type 1 firm needs licensed people who run the business. Check who in your team has the experience and clean record the SFC will look for.
3. Write your anti-money-laundering (AML) manual for crypto. An MSO manual built for cash remittance will not be enough. It needs wallet screening and a process for the "travel rule", which means passing sender and receiver details with each transfer.
4. Sort out custody. If you keep client coins, decide now whether you will hold the keys yourself or use a custodian that will be licensed.
5. Check your bank. Your bank will want to know your licence plan. Talk to them before the bill is published, not after.

If your business is mainly exchange of fiat money, compare this with a Hong Kong MSO licence. Some firms will keep the MSO for fiat and add the new licence for crypto.

How this fits with the rest of Hong Kong’s crypto rules

Hong Kong now licenses crypto through several different doors. The SFC licenses trading platforms, and our overview of how the SFC licenses crypto trading platforms explains that route. The Hong Kong Monetary Authority (HKMA) licenses stablecoin issuers. Customs licenses MSOs. The new dealer and custodian licences will add two more.

Choosing the wrong door wastes months. Our guide on whether your Hong Kong company needs a crypto license or an MSO licence compares the two most common choices side by side.

If you would rather not build the file alone, crypto licensing support can take a desk through the activity map and the officer checks while the bill is still in draft.

Frequently asked questions

Do I need a crypto license in Hong Kong for OTC trading?

Not yet under a dedicated regime. The government plans a new licence for virtual asset dealers, and it aims to put the bill to LegCo in 2026. Once the law starts, OTC dealing with Hong Kong clients will need it.

Will existing OTC desks get time to apply after the law starts?

Not while applications are checked. The FSTB said it does not plan to grant a deeming arrangement to existing dealers, and the regime takes full effect on its start date. The government says it will set that date with time for firms to prepare.

Is an MSO licence enough for a crypto OTC desk?

An MSO licence covers money changing and remittance. It is not a licence for dealing in virtual assets. Under the new regime, crypto dealing will need its own licence.

What is a virtual asset custodian licence?

It is a planned licence for firms that keep clients’ private keys in Hong Kong. The SFC said the regime will focus on the risks of safekeeping those keys.

When will the new Hong Kong dealer licence start?

No start date has been published. The government’s target is to introduce the bill in 2026, and the bill will set out when the licence starts.

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*Sources: FSTB and SFC consultation conclusions on virtual asset dealing and custodian services, and the Hong Kong government press release of 24 December 2025.*