Hong Kong financial institutions call for a halt: New regulations on crypto asset management may keep traditional funds out

RektRecovery · 2026-01-20T07:26:14+00:00

Hong Kong asset management institutions have expressed strong opposition to the newly introduced crypto asset management framework reform, especially the regulatory plan to abolish the 10% exemption policy for crypto assets, requiring even small allocations to apply for full licenses. This move has raised industry concerns, believing that the high compliance costs will suppress traditional asset management companies' interest in investing in crypto assets.

RektRecovery

2026-01-20 07:26:14

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【BlockBeats】Hong Kong asset management firms are a bit panicked.

On January 20th, the Hong Kong Securities and Futures Professionals Association submitted a position paper to regulators, strongly opposing the newly introduced crypto asset management framework reform. What is the core issue? The regulatory authorities plan to eliminate a key exemption policy.

Under the current rules, asset managers holding a Type 9 license (which fully authorizes investment portfolio and asset management activities) can allocate up to 10% of their funds to crypto assets. As long as they notify the regulators, no additional license upgrade is required. It’s quite convenient.

But after the reform, things will change. The new framework aims to completely remove this 10% exemption threshold. What does that mean? Even if you only want a 1% Bitcoin exposure, you must apply for a full virtual asset management license. This all-or-nothing regulatory logic has caused a stir in the industry.

The Hong Kong Securities and Futures Professionals Association bluntly stated: such an approach completely disregards proportionality principles. Everyone just wants to test the waters, but now they have to bear huge compliance costs for a 1% risk exposure. Who can accept that? Over time, traditional large asset management firms will no longer dare to venture into crypto assets.

This regulatory reform has actually been in the pipeline for a while. The Hong Kong Financial Services and the Treasury Bureau and the Securities and Futures Commission launched a public consultation as early as June last year, finalized it in December, and are now pushing forward with a supplementary licensing system covering crypto trading, consulting, and management services.

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BearMarketBuyer

· 10h ago

Starting to mess around again, this regulatory logic is really clever.

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GasFeePhobia

· 13h ago

This regulatory logic is really incredible—want a license even for 1%? Might as well just not touch it at all, since the costs are right here.

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ApyWhisperer

· 13h ago

Is this regulation in Hong Kong really a one-size-fits-all approach that directly forces traditional funds out of business? For just a 1% exposure, they have to get an entire virtual asset license—ridiculous.

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GateUser-44a00d6c

· 13h ago

This regulatory logic is really absurd. Do we have to reapply for a license just because of a 1% Bitcoin exposure? What the hell is going on?

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