Hong Kong Asset Management Association comments: Virtual asset license policy may hinder traditional fund entry

OnChainDetective · 2026-01-20T07:50:11+00:00

Hong Kong's new virtual asset regulation will remove the exemption threshold for licensed asset management institutions with License 9 from investing in cryptocurrencies, leading to increased compliance costs and potentially discouraging traditional asset management firms from exploring this area. At the same time, the new rules require assets to be held by licensed custodians, restricting the operations of Web3 venture capital funds. The association recommends introducing a self-custody option to maintain a balance between risk prevention and market innovation.

OnChainDetective

2026-01-20 07:50:11

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【ChainNews】Hong Kong’s virtual asset regulation has new developments. The regulatory authority plans to remove the exemption threshold for licensed asset management firms investing in cryptocurrencies with License No. 9. This sounds simple, but the consequences could be quite impactful.

Imagine: a fund that allocates only 1% of its assets in Bitcoin would also need to apply for a full virtual asset management license under this new regulation. What does this mean? Compliance costs will skyrocket, creating an disproportionate burden. The Hong Kong Securities and Futures Professionals Association openly opposes this, fearing it will directly hinder traditional asset management firms’ willingness to explore cryptocurrencies.

A deeper issue arises—the new regulation also requires assets to be held only through licensed custodians, which severely restricts the operational flexibility of Web3 venture capital funds. The association calls for more flexibility: introducing self-custody options and allowing offshore custody arrangements. This approach can help mitigate risks while leaving room for market innovation. The balance between regulation and innovation still needs to be refined.

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rugpull_survivor

· 10h ago

Damn, even 1% of Bitcoin needs to be fully licensed? This policy design is really outrageous, it's basically pushing traditional funds out of the market.

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MEVictim

· 10h ago

Huh? 1% Bitcoin also needs a full license? Hong Kong is really pushing traditional finance to the limit.

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IfIWereOnChain

· 10h ago

The operational space is stuck, and traditional funds are even less likely to touch cryptocurrencies. This regulatory approach is a bit counterintuitive.

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RektButStillHere

· 10h ago

Hong Kong's move is truly brilliant. Even 1% of BTC requires a full set of licenses. Isn't this just intimidating traditional funds to enter? They're basically sealing the door shut.

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MEVSupportGroup

· 10h ago

Damn, they're restricting again. Even 1% Bitcoin needs to reapply for a license? Is Hong Kong trying to push traditional funds out?

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CrossChainMessenger

· 10h ago

Hong Kong's recent move is really outrageous. Requiring a license for just 1% Bitcoin? Traditional funds have already been scared away, and the regulatory authorities are just playing around here.

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hodl_therapist

· 10h ago

Hong Kong's recent move is really outrageous. Requiring a full license for just 1% allocation? Are they trying to scare away traditional funds?

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