On 30 September 2025, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) issued a supplemental joint circular on intermediaries’ virtual asset-related activities (Supplemental Joint Circular), refining the regulatory framework for intermediaries engaged in virtual asset-related activities. This builds on the joint circular on intermediaries’ virtual asset-related activities issued on 22 December 2023 (2023 Joint Circular) and reflects evolving market practices, including the permissibility of staking since April 2025.
This article summarises the updates and clarifications made in the Supplemental Joint Circular.
By way of background, the 2023 Joint Circular sets out the requirements for intermediaries which intend to or are engaging in certain virtual asset dealing services, advisory services, asset management services and/or distribution of investment products with exposure to virtual assets (virtual asset-related activities).
In view of developments since December 2023, such as permitting engagement in staking activities since April 2025 (see SFC’s Circular of 7 April 2025 and HKMA’s Circular of the same date), refinements and relaxations are being made to the 2023 Joint Circular to facilitate market development while ensuring investors interests are continued to protected.
The key refinements and clarifications are:
a. Staking activities by intermediaries: as intermediaries are now permitted to provide staking services, subject to compliance with applicable regulatory requirements, the Licensing and registration conditions and terms and conditions for licensed corporations or registered institutions providing virtual asset dealing services and virtual assets advisory services (Terms and Conditions) are updated to reflect the same (see the updated Terms and Conditions appended to the Supplemental Joint Circular).
b. Use of off-platform services of SFC-licensed platforms: in providing virtual assets dealing services to clients, intermediaries may now execute trade via the off-platform virtual asset trading services of SFC-licensed platforms. The Terms and Conditions are updated accordingly.
c. Subscribing for or redeeming investment products using virtual assets: in-kind subscriptions or redemptions of virtual assets funds or in investment products are not considered as virtual asset dealing services. However, relevant intermediaries, including asset managers, should notify the SFC (and the HKMA, where applicable) in advance of such activities, hold virtual assets in account(s) or in a manner compliant with regulatory expectations and ensure compliance with applicable provisions of the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations and SFC-licensed Virtual Asset Service Providers).
d. Distribution of investment products with exposure to virtual assets: where intermediaries are marketing investment products with exposure to virtual assets to clients who are institutional professional investors and qualified corporate professional investors, the SFC and HKMA clarified that the following requirements are not applicable: (i) ensuring that such clients have sufficient net worth to be able to assume the risks and bear the potential losses of trading in virtual assets-related products and (ii) provision of risk statements specific to virtual asset futures contracts.
The Supplemental Joint Circular also reminded intermediaries to notify the SFC before making changes to their virtual asset-related activities, including the type(s) of clientele served, allowing clients to deposit or withdraw virtual assets from the intermediaries’ account for the first time, providing staking services for the first time, allowing clients to subscribe for or redeem from products using virtual assets for the first time or other material changes to the arrangements for such activities as first communicated.
The SFC’s iterative approach reflects Hong Kong’s commitment to becoming a virtual assets hub while mitigating risks. We look forward to more developments in this space in the coming year.
