AMLO Virtual Asset License

Hong Kong over-the-counter virtual asset trading
(VA Dealing)Complete Guide to the Licensing System

Comprehensive Analysis of the VA Dealing License under the AMLO Framework—Definition, Application Requirements, Fees, Compliance Requirements, and Licensing Strategy

With the FSTB and SFC releasing their consultation conclusions in December 2025, the framework for the Hong Kong Virtual Asset Trading (VA) licensing system has been largely established. A bill is expected to be submitted to the Legislative Council in 2026, at which time all institutions providing virtual asset trading services in Hong Kong—including OTC dealers, brokers, and market makers—will be required to operate with a license. AIYING provides one-stop consulting services from qualification assessment to ongoing compliance.

HK$500 million

Minimum Paid-up Capital

[Proposed]

450+

Hong Kong VA OTC-related entities (physical + online)

⚠ Speculation

2026

Expected legislative time

✓ Confirmed
Section 1

Current Status and Supervisory Background of Hong Kong VA OTC Market

Hong Kong VA OTC Market Size

Hong Kong is one of the most active over-the-counter (OTC) markets for virtual assets in the Asia-Pacific region. As of 2025, there were approximately 200 physical VA OTC stores and 250 online VA trading platforms operating in Hong Kong, the vast majority of which were unregulated. This massive market size and regulatory vacuum is the direct motivation for the introduction of the VA Dealing Licensing Scheme.

~200

Physical OTC stores

⚠ Speculation

~250

Online trading platform

⚠ Speculation

HK$16 billion+

The amount involved in the JPEX case

⚠ Speculation

JPEX Case: Regulatory Catalyst

In September 2023, the virtual asset trading platform JPEX was investigated by the Hong Kong police for suspected fraud, involving more than 2,600 victims and more than HK$16 billion. The JPEX case directly prompted the Hong Kong government to accelerate legislation to regulate virtual assets, including the introduction of the VA Dealing Licensing Scheme.

  • JPEX is promoting itself to the public without obtaining an SFC license.
  • This exposed regulatory blind spots outside the VATP system.
  • This directly catalyzed the development of VA OTC regulatory consulting.

VA Dealing Supervision Evolution Timeline
Major Changes

The joint consultation document in June 2025 marks a major shift in the VA Dealing regime: the regulatory body will change from Customs and Excise Department (CED) to Special Financial Services (SFC), the scope of regulation will expand from limited to VA-fiat spot trading to all VA trading services (including brokerage, market making, etc.), and the regime name will be changed from "VA OTC Trading" to "VA Dealing".

Section Two

What is VA Dealing?

The definition of VA Dealing aligns with the SFO's Type 1 definition of "dealing in securities"—replacing "securities" with "virtual assets." It encompasses all VA trading activities conducted in a business-like manner, including but not limited to: buying and selling VA as a party or agent, brokerage, market making, and liquidity provision.

— Source: FSTB+SFC Joint Consultation Summary (December 24, 2025) ✅ Confirmed

The VA Dealing license is a new type of license established by the Hong Kong government under the AMLO (Anti-Money Laundering and Terrorist Financing Ordinance) framework, specifically for virtual asset trading service providers. Unlike licenses 1-12 under the SFO, the VA Dealing license operates independently under the AMLO framework and is regulated by the SFC.

View the SFC ASPIRe roadmap

Quick Reference
License Name VA Dealing Service Provider License Confirmed
legal framework AMLO (Anti-Money Laundering Regulation) Amendments Confirmed
regulatory agency SFC (Securities and Futures Commission) Confirmed
Suitable All institutions that provide VA transaction services through business operations Confirmed
Licence validity period To be determined (refer to the VATP system) [Proposed]
Minimum Paid-up Capital HK$500 million [Proposed]
Minimum quick capital HK$300 million [Proposed]
RO minimum number of people 2 [Proposed]
Transitional arrangements No deeming arrangement Confirmed
Legislative Timetable The bill is expected to be submitted in 2026. Confirmed

The consultation summary in December 2025 confirmed that Hong Kong will establish four independent VA (Virtual Asset) licensing regimes under the AMLO framework, forming a complete regulatory ecosystem for virtual assets. VA Dealing is the first type of license to be promoted.

VA Dealing

Benchmark against SFO: Type 1 (Securities Trading)
Virtual asset trading services
Consultation summary has been published.

✓ Confirmed

VA Custody

Benchmark against SFO: Type 13 (Managed)
Virtual asset custody service
Consultation summary has been published.

✓ Confirmed

VA Advisory

Benchmark against SFO: Type 4 (Providing advice on securities)
Virtual asset investment advice
Further consultation is underway.

[Proposed]

VA Management

Benchmark against SFO: Type 9 (Asset Management)
Virtual asset management
Further consultation is underway.

[Proposed]

VA Advisory和VA Management的進一步諮詢於2025年12月同步啟動，諮詢截止日期為2026年1月23日。

Dimensions VATP license VA Dealing License
legal framework AMLO (effective) AMLO Revision (Proposed)
Suitable Operate the VA trading platform (matching engine) All VA trading service providers (OTC, brokers, market makers, etc.)
business model Centralized matchmaking Over-the-counter trading, brokerage, market making, liquidity provision
regulatory agency SFC SFC
Capital requirements HK$500 million paid-up share capital HK$500 million fully paid-up share capital [Proposed]
Customer VA Hosting Self-hosting (subject to certain conditions) Must be managed by an SFC-licensed VA Custodian
Token listing SFC approval required Proposed retail-limited high-liquidity tokens
Implementation status It took effect in June 2023. Legislation is expected in 2026.
Can I hold them at the same time? can can
Dimensions Current VA uplift (Type 1/4/9) New VA Dealing License
legal framework SFO + Joint Circular AMLO Revision
Regulatory methods SFC regulates through licensing conditions. Independent AMLO license
Scope of application SFC-licensed intermediaries only All VA trading service providers
Execution Channel Must be done through an SFC-licensed VATP consolidated account Must be sold through an SFC-licensed VATP or VA dealer.
Token range Limited to market index tokens Highly liquid tokens, expected to be more flexible [Proposed]
Hosting requirements Typically held in escrow by VATP/bank Must be managed by an SFC-licensed VA Custodian
Margin Trading not allowed Within the scope, specific conditions are yet to be determined [Proposed]
Staking/Lending not allowed The proposed inclusion is under consideration.
Connection Arrangements Further clarification is needed from the SFC. Licensed institutions can receive expedited approval.

AIYING suggests

If you are currently conducting VA business through VA uplift conditions, we recommend:

  1. Closely monitor the SFC's further guidance regarding the connection between VA uplift and VA Dealing.
  2. Assess whether the existing business fully falls within the scope of the VA Dealing definition.
  3. Initiate pre-application communication with SFC as early as possible.
  4. Compliance plan for transitioning from SFO license requirements to an independent AMLO license

Forced external hosting

VA Dealing licensees are not allowed to hold client VAs themselves; they must be held by an SFC-licensed VA Custodian – this is a key characteristic that distinguishes them from VATP licensees.

No transition period

No deeming arrangement will be set. Once the regulations take effect, unlicensed entities must immediately cease VA trading services. The SFC strongly recommends initiating pre-applications as soon as possible.

AMLO Independent Framework

Unlike licenses 1-12 under SFO, VA Dealing operates independently under the AMLO framework, forming a four-license ecosystem alongside VATP, VA Custody, VA Advisory, and VA Management.

Section 3

Which organizations need to apply for a VA Dealing license?

VA OTC physical stores

Operating a physical virtual asset exchange shop in Hong Kong, providing customers with on-site exchange services between VA and fiat currency.

VA Dealing License (Required)
  • There are approximately 200 such shops in Hong Kong.
  • The first consultation in 2024 focused on these types of shops as the main targets of supervision.
  • It must also meet the compliance requirements of physical business premises.
  • Customers must hire an SFC-licensed VA Custodian to hold their VA.

Online VA brokers/trading platforms

The online platform provides VA trading services to clients, but not through a matching engine (non-VATP model), instead acting as a counterparty or broker.

VA Dealing License (Required)
  • There are approximately 250 such online platforms in Hong Kong.
  • This includes platforms that offer VA-to-fiat, fiat-to-VA, and VA-to-VA trading.
  • If a matching engine is also operating, a VATP license is required.
  • Transactions can be executed through SFC-licensed VATP or non-SFC-licensed liquidity providers (subject to additional safeguards).

VA Market Maker/Liquidity Provider

Provide liquidity to the VA market and earn spreads through continuous quotes and trades.

VA Dealing license (required) + Type 1 license may be required.
  • Market-making activities clearly fall within the scope of the VA Dealing definition.
  • If security tokens are also involved, an SFO Type 1 license may also be required.
  • Capital requirements may need to exceed the minimum standard depending on the size of the business.
  • A sound risk management and market manipulation prevention mechanism needs to be established.

VATP, already licensed, is expanding its OTC business.

Trading platforms that have obtained SFC VATP licenses wish to offer OTC block trading or brokerage services in addition to platform-based transaction matching.

VA Dealing License (additional application) + expedited approval available
  • VATP licensees that already hold a license are eligible for expedited approval.
  • In-platform matching transactions are still covered by the VATP license.
  • Off-platform OTC trading requires a VA Dealing license.
  • Both licenses can be held simultaneously.

SFC-licensed entity (VA uplift)

Intermediary agencies that hold SFC Type 1/4/9 licenses and conduct VA business through VA uplift conditions.

VA Dealing license (may be required) + expedited approval available
  • It is necessary to assess whether the existing VA business falls under the definition of VA Dealing.
  • Licensed institutions are eligible for expedited approval.
  • Under the new system, it may be necessary to hold both an SFO license and an AMLO license.
  • It is recommended to communicate with SFC as soon as possible to confirm the handover arrangements.

Overseas VA trading service providers

Operating VA trading services overseas, hoping to enter the Hong Kong market or provide services to Hong Kong clients.

VA Dealing License (Required) + Hong Kong Registration
  • A company must be registered in Hong Kong or a branch of an overseas company.
  • Must have actual business operations and management in Hong Kong
  • Overseas regulatory records may help expedite approval.
  • The "active marketing" rule applies – promoting VA trading services to the Hong Kong public.
    This will trigger the licensing requirements.
Section Four

VA Dealing License Scope and Restrictions

The definition of VA Dealing aligns with Type 1 "dealing in securities" under SFO and covers a broad range of activities. The following activities all require a VA Dealing license:

Activity type Explain Certainty
VA spot trading Buying and selling VA as a party or agent (VA-to-fiat, fiat-to-VA, VA-to-VA) Confirmed
VA Broker Matching or arranging VA transactions for clients Confirmed
VA Market Making Provide continuous quotes and liquidity to the VA market Confirmed
Large transactions Provide large-volume VA transaction services for institutional clients Confirmed
liquidity provision Providing liquidity to other VA trading service providers Confirmed
Staking services Providing VA pledging services to clients [Proposed]
VA lending Providing VA lending services to customers [Proposed]
Margin Trading Providing clients with VA margin/leverage trading [Proposed]

Whether staking, VA lending, and margin trading are included in the scope of the VA Dealing license will be determined by the SFC based on factors such as customer credit risk, liquidity risk, and operational control.

The following activities may be exempt from VA Dealing license requirements. Note: Except for HKMA-licensed stablecoin issuers, most exemptions are still "under consideration" and have not yet been finalized.

Exemption Explain status
HKMA-licensed stablecoin issuer VA transactions involved in the issuance and redemption of stablecoins Exemption confirmed
Transactions through an SFC-licensed VA dealer Transactions executed by the client through a licensed VA dealer Under consideration
Principal trading VA transactions conducted with own funds Under consideration
Intra-group transactions VA transactions within the same group Under consideration
VA as a means of payment Payment behavior using VA to purchase goods or services Under consideration
VA administrator incidental transaction SFC-licensed VA managers engage in incidental transactions solely for the purpose of providing management services. Expected Exemption
Mining reward distribution Mining pool operators distribute rewards earned from block maintenance/transaction verification Under consideration
VA Issuer Activities VA projects are offered through SFC-licensed intermediaries or exclusively to professional investors. Under consideration
PE/VC fund managers Self-hosting within a finite threshold Under consideration

Most exemptions are still under consideration, and the final scope of exemptions will be subject to the official legislative text. Before an exemption is confirmed, it is advisable to conservatively assess whether your business needs to apply for a license.

The VA Dealing license has specific restrictions on the types of tokens that can be traded, and the restrictions differ between retail clients and professional investors.

Dimensions Retail customers professional investors
tradable tokens Only for "highly liquid" tokens (such as BTC and ETH) A wider range of VA varieties
Stablecoin Stablecoins issued only by HKMA-licensed issuers A wider range of stablecoins
due diligence Requires VA knowledge assessment + risk tolerance test Reasonable due diligence needs to be completed.
Risk Disclosure Sufficient risk disclosure documents must be provided. Standard Risk Disclosure
Tokenized Securities Not within the scope of VA Dealing (subject to SFO oversight) Not within the scope of VA Dealing

Explanation of exclusions

The following are not covered by the VA Dealing license:

  • Tokenized securities – regulated under SFO by Type 1 licenses and other similar licenses.
  • Central Bank Digital Currency (CBDC) — Not within the VA definition
  • Limited-use digital tokens (such as game tokens, points) — not within the VA definition

VA Dealing licensees have specific restrictions on transaction execution.

Activity type Explain Certainty
VA spot trading Buying and selling VA as a party or agent (VA-to-fiat, fiat-to-VA, VA-to-VA) Confirmed
VA Broker Matching or arranging VA transactions for clients Confirmed
VA Market Making Provide continuous quotes and liquidity to the VA market Confirmed
Large transactions Provide large-volume VA transaction services for institutional clients Confirmed
liquidity provision Providing liquidity to other VA trading service providers Confirmed
Staking services Providing VA pledging services to clients [Proposed]
VA lending Providing VA lending services to customers [Proposed]
Margin Trading Providing clients with VA margin/leverage trading [Proposed]

Industry Focus

While the "vast majority" of consultation respondents supported allowing trading through VATPs not licensed by the SFC but regulated in other jurisdictions, the FSTB and SFC backed down in their consultation conclusions. Currently, only trading through shared order books of SFC-licensed VATPs is permitted. Industry pressure is expected to continue to ease this restriction.

Section Five

VA Dealing License Application Requirements

Requirements Specific requirements Certainty
Place of registration Hong Kong registered companies or branches of overseas companies registered in Hong Kong [Proposed]
Actual operation Must have substantial business operations and management in Hong Kong [Proposed]
Suitable person The corporation and its major shareholders must be "fit and proper". [Proposed]
Paid-up share capital Minimum HK$500 million [Proposed]
Quick funds Minimum HK$300 million (depending on business model) [Proposed]
Excess quick funds ≥12 months of actual operating costs [Proposed]
RO number of people At least two responsible officers. [Proposed]
VA Custodian Customers must hire an SFC-licensed VA Custodian to hold their VA. Confirmed
AML/CFT A comprehensive AML/CFT compliance framework needs to be established. Confirmed
business plan A detailed business plan must be submitted. [Proposed]
Internal Control A comprehensive internal control and risk management system must be established. [Proposed]
Professional Indemnity Insurance Professional indemnity insurance must be purchased (amount to be determined). [Proposed]

RO (Responsible Personnel) Requirements

Requirements Specific requirements Certainty
Suitable person Must be a "fit and proper" candidate. [Proposed]
Ability Requirements The ability to align with SFO Type 1 RO is required. [Proposed]
Industry experience Relevant industry experience (specific years to be determined) [Proposed]
Exam Requirements It is expected that relevant exams will be required (specific subjects to be determined). Guess
Local residency At least one RO must be based in Hong Kong. [Proposed]
Supervisory duties Direct oversight of the day-to-day operations of VA Dealing business is required. [Proposed]

LR (Licensed Representative) Requirements

Requirements Specific requirements Certainty
Suitable person Must be a "suitable candidate" [Proposed]
Ability Requirements The ability to align with SFO Type 1 LR is required. [Proposed]
CPT Continuing professional training must be completed. [Proposed]
Requirements Specific requirements Certainty
IT systems Secure and reliable transaction and recording system [Proposed]
cyber security Protective measures that comply with SFC network security requirements [Proposed]
Transaction monitoring Real-time transaction monitoring and anomaly detection system [Proposed]
record keeping Transaction records must be kept for at least 5 years (as required by AMLO Schedule 2). Confirmed
BCP/DRP Business continuity plan and disaster recovery plan [Proposed]
客戶系統 Customer authentication and KYC system Confirmed
AML system Transaction screening and suspicious transaction monitoring system Confirmed
Blockchain Analysis SFC encourages the use of AI and blockchain analytics tools to enhance compliance. Confirmed

Self-assessment of VA Dealing license application eligibility

The following criteria will help you quickly assess whether you meet the basic qualifications to apply for a VA Dealing license.

  • Our company is registered or plans to register in Hong Kong.
  • The company has a physical place of business operation in Hong Kong.
  • The company and its major shareholders have no major adverse records.
  • Able to meet the minimum paid-up share capital requirement of HK$500 million
  • Able to maintain a minimum of HK$300 million in quick cash.
  • At least two qualified RO candidates have been identified.
  • Our company is registered or plans to register in Hong Kong.
  • The company has a physical place of business operation in Hong Kong.
  • The company and its major shareholders have no major adverse records.
  • Able to meet the minimum paid-up share capital requirement of HK$500 million
  • Able to maintain a minimum of HK$300 million in quick cash.
  • At least two qualified RO candidates have been identified.
Section Six

VA Dealing License Application Process

Phase 1: Pre-application Phase

Confirmed 1-3 months

SFC strongly recommends pre-application communication before formally submitting the application.

  • Contact SFC Fintech Contact Point
  • Submit a preliminary business plan summary
  • Discussion of business models and regulatory expectations
  • Received initial feedback from SFC regarding the application direction.
  • Confirm the specific list of documents required for the application

Phase 2: Application Preparation Phase

[Proposed] 3-6 months

Prepare all application materials and internal compliance framework.

  • Prepare a detailed business plan
  • Establish an AML/CFT compliance framework
  • Identifying RO and LR candidates
  • Hiring SFC-licensed VA Custodian
  • Establish IT systems and security architecture
  • Prepare financial statements and proof of capital
  • Develop internal control and risk management policies

Phase 3: Formal Application Submission

[Proposed]

Formal submission of license application to SFC

  • Fill out the application form specified by SFC
  • Submit all supporting documents
  • Pay application fee
  • Submitting individual applications for RO and LR

Phase 4: SFC Review Phase

Guess 6-12 months (estimated)

SFC conducts a comprehensive review of applications.

  • SFC reviews the completeness of application materials.
  • Conduct appropriate candidate assessments for corporations and individuals.
  • Additional information or an interview may be required.
  • On-site inspection may be conducted.
  • SFC Internal Audit Process

Phase 5: License Issuance

[Proposed]

The license will be officially issued after approval.

  • SFC issues license approval notice
  • Specific licensing conditions may apply.
  • The validity of the license is pending (expected to be determined with reference to the VATP system).
  • It must be renewed periodically in accordance with SFC regulations.

Expedited Approval Channel

Already holds an SFC VATP license
Expedited approval ✓ Confirmed
Licensed corporations that already hold an SFC license
Expedited approval ✓ Confirmed
Institutions already registered with HKMA
Expedited approval ✓ Confirmed
Overseas regulated VA service providers
May gain convenience Guess
AIYING suggests

The SFC has explicitly stated that there will be no deeming arrangement, and unlicensed entities must immediately cease all VA trading services once the regulations take effect. Therefore, the SFC strongly advises interested entities to initiate the pre-application process as early as possible to ensure approval is completed before the regulations take effect.

Section Seven

VA Dealing License Fees and Capital Requirements

License Fees

Cost items Amount of money Certainty
License application fee HK$4,740 (Refer to SFO Type 1 standard) [Proposed]
License annual fee HK$4,740 (Refer to SFO Type 1 standard) [Proposed]
RO application fee The specific amount is to be determined in accordance with the SFO standard. [Proposed]
LR application fee The specific amount is subject to confirmation based on the SFO standard. [Proposed]

Capital requirements

Requirements Amount of money Certainty
Minimum Paid-up Capital HK$500 million aligned with SFO Type 1 [Proposed]
Minimum quick capital HK$300 million may be higher depending on the business model. [Proposed]
Excess quick funds Operating expenses must be met for at least 12 months. [Proposed]
Professional Indemnity Insurance Amount and scope to be determined [Proposed]

Continuing operating costs

VA Custodian Fees
continued

Service fee for hiring an SFC-licensed VA Custodian

Compliance personnel compensation
continued

Compensation for compliance personnel such as CO and MLRO

IT system maintenance
continued

Maintenance and upgrades of trading systems and security systems

External audit fees
year

Annual financial audit and compliance audit

Blockchain analytics tools
continued

SFC encourages the use of compliance technology tools

training costs
continued

Continuous professional training for RO, LR and employees

License renewal fee
Regular

License renewal fee (specific week to be determined)

Legal counsel fees
continued

Ongoing legal compliance consultation

Total cost estimate

CAD underestimate overestimated Remark
Initial setup costs HK$800 million HK$1,500 million Including capital, systems, and personnel
Annual operating costs HK$300 million HK$600 million Including personnel, systems, and compliance
Total cost over 3 years HK$1,700 million HK$3,300 million Initial setup + 3 years of operation
Cost estimation explanation

The above cost estimates are based on AIYING's industry experience and publicly available information and are for reference only. Actual costs will vary depending on business scale, operating model, and market conditions. Specific fees are subject to the official pricing standards published by SFC. We recommend contacting AIYING for a detailed cost analysis tailored to your specific circumstances.

Section 8

Continuing Compliance Obligations and Penalties

AML/CFT
Customer Protection
Operational compliance
reporting obligations
Capital maintenance
Punishment mechanism

AML/CFT compliance is a core obligation of VA Dealing licenses. The SFC has explicitly stated that VA Dealing licensees must comply with the same AML/CFT requirements as VATP and encourages the use of AI and blockchain analytics tools to enhance compliance capabilities.

Requirements Specific requirements Certainty
CDD/KYC Conduct customer due diligence on all clients. Confirmed
ESD Enhanced due diligence for high-risk clients Confirmed
Transaction monitoring Continuous monitoring of customer transaction activities Confirmed
Suspicious transaction report Report suspicious transactions to JFIU Confirmed
Travel Rules Compliance with FATF Travel Rule requirements Confirmed
Sanctions Screening Screening of customers and transactions for sanctions list Confirmed
risk assessment Regularly conduct ML/TF risk assessments Confirmed
record keeping Transaction and KYC records must be kept for at least 5 years (AMLO Schedule 2). Confirmed
Blockchain Analysis SFC encourages the use of blockchain analytics tools Confirmed
protective measures Specific requirements Certainty
Asset segregation Client assets must be strictly separated from the company's own assets. Confirmed
external hosting Customer VA must be held in custody by an SFC-licensed VA Custodian. Confirmed
Risk Disclosure Provide clients with adequate risk disclosure documents [Proposed]
Suitability assessment Conduct VA knowledge assessments and risk tolerance tests for retail customers. [Proposed]
Complaint Handling Establish a sound customer complaint handling mechanism [Proposed]
Fair pricing Ensure fair and reasonable transaction prices [Proposed]
Conflict of interest Identifying and managing conflicts of interest [Proposed]
information security Protecting customer personal information and transaction data Confirmed
Compliance items Specific requirements Certainty
Internal Audit Conduct regular internal compliance audits [Proposed]
External Audit Annual financial audit and compliance audit [Proposed]
BCP/DRP Maintain and periodically test the business continuity plan. [Proposed]
cyber security Compliant with SFC network security requirements [Proposed]
Change Notice Major business changes must be notified to the SFC in advance. [Proposed]
Personnel Management Ensure that RO and LR continue to meet eligibility requirements. [Proposed]
Outsourcing Management Conduct appropriate due diligence and supervision of outsourcing service providers [Proposed]
Report Types frequency Explain Certainty
Financial reporting Semi-Annual/Annual Submit financial statements to SFC [Proposed]
Compliance Report year Submit a compliance report to the SFC [Proposed]
Suspicious transaction report Immediately Report suspicious transactions to JFIU Confirmed
Major Event Report Immediately Report major incidents (such as safety incidents or significant losses) to the SFC. [Proposed]
Business Statistics Regular Submit business statistics data to SFC [Proposed]
Audit Report year Submit an external audit report to the SFC [Proposed]
Violations Punishment Certainty
Unlicensed VA Dealing Criminal offence: HK$500 million fine + 7 years imprisonment, with an additional HK$10 fine per day for continued offenses. Confirmed
Violation of AML/CFT requirements Criminal penalties will be determined based on the severity of the violation (refer to the VATP system). Confirmed
Violation of license conditions SFC may revoke or suspend license [Proposed]
False or misleading statements Criminal offenses [Proposed]
SFC directive not followed Disciplinary action + possible criminal penalties [Proposed]
Serious Consequences Warning
Operating a VA (Visa Dealing) business without a license is a criminal offense, punishable by a maximum fine of HK$500 million and imprisonment for up to 7 years, with an additional HK$10 fine per day for continued violations. The SFC has made it clear that there will be no transitional arrangements, and strict enforcement will be implemented once the regulations take effect. All relevant organizations are advised to assess their businesses as soon as possible and begin preparing for license applications.
Section Nine

VA Dealing License Strategy Recommendations

Strategy 1: Start Pre-application as early as possible

highest priority

The SFC explicitly recommends that organizations intending to apply initiate the pre-application process as early as possible. Given the absence of a transition period, early communication ensures approval is completed before the regulations take effect.

  • Contact SFC Fintech Contact Point
  • Submit a preliminary business plan summary
  • Obtain initial feedback from SFC regarding the business model.
  • Understand the specific requirements of the SFC for application materials.

Applicable to: All organizations planning to apply for a VA Dealing license

Strategy Two: Leveraging Existing License Advantages

High priority

Organizations already holding an SFC license can receive expedited approval. It is recommended to fully utilize existing compliance frameworks and regulatory relationships to reduce application costs and time.

  • Assess the compatibility between existing SFC licenses and VA Dealing
  • Reuse existing AML/CFT compliance framework
  • Utilize existing RO resources (such as those that meet VA Dealing requirements).
  • Discussing specific arrangements for expedited approval with SFC

Applicable to: Organizations that already hold an SFC VATP license or a Type 1/4/9 license.

Strategy 3: Phased Compliance Preparation

Recommend

For organizations that do not yet hold any SFC licenses, it is recommended to adopt a phased strategy to gradually establish a compliance framework and reduce the pressure of one-time investment.

  • Phase 1: Legal Structure and Company Registration (1-2 months)
  • Phase Two: Establishing a Compliance Framework (2-4 months)
  • Phase 3: IT Systems and Staffing (2-3 months)
  • Phase 4: Formal application submission and communication with SFC

Target audience: New VA trading service providers entering the Hong Kong market

Strategy 4: Multi-license combination strategy

long term planning

Depending on business development needs, we may consider applying for multiple VA-related licenses simultaneously or in stages.
Build a complete set of business capabilities.

  • VA Dealing + VA Custody: Self-hosting capabilities
  • VA Dealing + VATP: Covering OTC and Platform Trading
  • VA Dealing + VA Advisory: Providing trading and advisory services
  • Assess the cumulative effect of capital requirements for each license

Target audience: Large organizations planning to provide comprehensive VA services

Quick Decision Guide

Have you registered a company in Hong Kong?

Yes → Continue evaluation No → Hong Kong company registration must be completed first.

Do you already hold an SFC license?

Yes → Expedited approval is possible; it is recommended to initiate the process as soon as possible. No → Need to start preparing from scratch

Does your business involve retail customers?

Yes → Additional retail customer protection requirements must be met. No → Only for professional investors, requirements are relatively simplified.

Can you meet the requirement of HK$500 million paid-up share capital?

Yes → Meets the basic capital threshold No → Alternative solutions or financing need to be considered.

Do you already have an AML/CFT compliance framework?

Yes → Reusable existing framework No → You need to start from scratch; it is recommended to hire a professional consultant.
AIYING suggests

Regardless of the strategy you choose, the most important thing is to act as early as possible. The SFC's lack of a transition period means there is no compliance window after the regulations take effect. AIYING can provide you with full-service consulting, from strategy planning to application submission, to help you choose the optimal licensing path.

Sector 10

Alternatives to not applying for a VA Dealing license

If your organization is temporarily unable or does not intend to apply for a VA Dealing license, the following are alternative paths to consider.

Overseas VA license

Apply for VA-related licenses in other jurisdictions, such as the Singapore MAS DPT license, the Dubai VARA license, and the EU MiCA license.

Advantage
  • Some jurisdictions have lower thresholds
  • It can cover a wider market.
  • Approval processes are faster in some regions.
Inferiority
  • Unable to legally provide services to Hong Kong customers
  • The requirements vary greatly across different jurisdictions.
  • May face multiple compliance costs

Target audience: VA service providers whose business focus is not in Hong Kong

SFO license + VA uplift

Apply for a Type 1/4/9 license under the SFO and conduct VA business through VA uplift conditions. This was the current path before the introduction of the VA Dealing system.

Advantage
  • The system is mature and the path is clear.
  • It can simultaneously conduct traditional securities and VA business.
  • There are already numerous precedents
Inferiority
  • Additional applications may be required after the VA Dealing program takes effect.
  • VA uplift has many restrictions.
  • Must be executed through SFC-licensed VATP

Target audience: Institutions involved in both traditional securities and VA (Visa Agency) businesses

Partnering with licensed institutions

Instead of applying for a license themselves, they establish partnerships with licensed or soon-to-be-licensed VA Dealing agencies and conduct business through white-label or referral models.

Advantage
  • No need to bear the license costs yourself
  • It can quickly enter the market.
  • Reduce compliance burden
Inferiority
  • Limited business autonomy
  • Profit sharing
  • Depends on the compliance status of partners

Target audience: Smaller organizations or those seeking a lean asset operation

Business Transformation

Adjust the business model to one that does not require a VA Dealing license, such as a pure technology service provider or a VA information platform.

Advantage
  • No license required
  • Low operating costs
  • Focus on technological advantages
Inferiority
  • Business scope is limited
  • Unable to directly participate in VA trading
  • Market competitiveness may decline

Target audience: Technology-oriented companies or organizations unwilling to bear the costs of licensing.

Important Notice

Alternative options do not completely replace a VA Dealing license. If your business involves providing VA transaction services in Hong Kong on a business basis, a VA Dealing license will be legally required. It is recommended that you conduct a detailed business assessment with AIYING before selecting an alternative to ensure that your choice complies with legal requirements.

Section Eleven

Frequently Asked Questions (FAQ)

A VATP license applies to entities operating virtual asset trading platforms (i.e., trading through a matching engine), while a VA Dealing license applies to all entities providing VA trading services on a business basis, including OTC dealers, brokers, market makers, etc. Both licenses can be held simultaneously. The main difference is that VATP allows entities to self-manage their clients' VA (subject to certain conditions), while VA Dealing must be managed by an SFC-licensed VA Custodian.

The proposed minimum paid-up share capital is HK$500 million, and the minimum quick capital is HK$300 million, aligned with the Type 1 capital requirements under the SFO. Furthermore, excess quick capital must be no less than 12 months of actual operating expenses. Actual capital requirements may exceed the minimum standards depending on the business size and model.

The proposed minimum paid-up share capital is HK$500 million, and the minimum quick capital is HK$300 million, aligned with the Type 1 capital requirements under the SFO. Furthermore, excess quick capital must be no less than 12 months of actual operating expenses. Actual capital requirements may exceed the minimum standards depending on the business size and model.

No. The VA Dealing regime requires licensed institutions to entrust their clients' VA (Visas) to an SFC-licensed VA Custodian for safekeeping; self-custody is prohibited. This is one of the core differences between a VA Dealing license and a VATP (Visa Accreditation Programme) license. If self-custody is desired, a separate VA Custody license is required.

The following entities are eligible for expedited approval: (1) trading platforms that already hold an SFC VATP license; (2) licensed corporations that already hold an SFC license (such as Type 1/4/9); and (3) entities that are registered with the HKMA. Overseas regulated VA service providers may also receive some facilitation, but specific arrangements have not yet been confirmed.

The specific validity period has not yet been specified in the consultation summary and is expected to be determined in formal legislation, referencing the VATP system. Licensed institutions must renew their licenses periodically in accordance with SFC regulations, and the SFC will reassess whether the institution continues to meet the licensing requirements during renewal.

For retail clients, trading is limited to "highly liquid" tokens (such as BTC and ETH) and stablecoins issued by HKMA-licensed issuers. For professional investors, a wider range of VA products are available for trading. Tokenized securities are not within the scope of VA Dealing and are subject to SFO regulation.

It may be necessary. If your VA business activities fall within the definition of VA Dealing (i.e., conducting VA transactions in a business manner), you will need to apply for a VA Dealing license. The SFC will further clarify the connection between VA uplifts and VA Dealing. It is recommended to communicate with the SFC for confirmation as soon as possible.

Yes, but you must register a company in Hong Kong or a branch of an overseas company, and have actual business operations and management in Hong Kong. Furthermore, the "aggressive marketing" rule applies – promoting VA trading services to the Hong Kong public triggers the licensing requirements, even if the institution itself is not registered in Hong Kong.

從啟動pre-application到獲批，預計總時間為12-24個月。其中pre-application階段約1-3個月，申請準備約3-6個月，SFC審核約6-12個月。已持有SFC牌照的機構可能獲得加速審批，時間可能縮短。

Operating a VA Dealing business without a license is a criminal offense, punishable by a maximum fine of HK$500 million and imprisonment for up to 7 years, with an additional HK$10 fine per day for continued violations. Violations of AML/CFT requirements may also result in criminal penalties, depending on the severity of the violation (refer to the existing VATP system). The SFC may also take disciplinary action against violating entities, including revocation or suspension of their licenses.

About Aiying

Aiying (License.aiying.cc) specializes in global traditional finance and Web3-related license application and acquisition consulting services. With teams primarily located in Hong Kong, the UAE, and Europe, and strong relationships with local regulators, Aiying has successfully secured applications and smooth operations for leading and mid-tier crypto and traditional institutions. Team members are qualified in Hong Kong, Europe (Ireland), the UK, the UAE, and other jurisdictions, with a global network ensuring XNUMX/XNUMX professional support. Headquartered in Asia, the team brings together experts in operations, marketing, law, regulatory compliance, and accounting, adhering to clients' business objectives to provide comprehensive and in-depth strategies and solutions.

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Based on SFC official guidelines and Aiying's practical experience, we provide the most authoritative application guidance.

Useful Checklist

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100+ successful case experience summary, avoid common pitfalls and improve success rate

global vision

Integrate international best practices to ensure the forward-looking and adaptable compliance system

Aiying's "pre-screening mechanism"

To maximize your success rate, Aiying conducts an internal mock review of your application materials before formal submission. Our expert team acts as a regulator, scrutinizing each document from the most rigorous perspective to identify logical loopholes, data inconsistencies, and compliance gaps in advance.

Through this mechanism, we can ensure that the materials submitted to the regulatory authorities are highly professional, complete and impeccable, thereby minimizing the number of regulatory inquiries and significantly shortening the approval time.And reduced the license rejection rate by 67%.