OTC trading, with its advantages of flexible amounts and convenient processes, occupies an important position in the digital asset ecosystem in Hong Kong and is highly favored by institutions and large traders. At present, there are about 60 active OTC merchants in Hong Kong, covering various related businesses. However, due to the lack of clear special supervision, there are issues such as inconsistent compliance and weak risk control, which have become the focus of supervision.
This regulatory framework will fill the regulatory gap in the OTC and custody fields. A capital of HKD 5 million is the core compliance threshold, which is consistent with the requirements of the Hong Kong Securities and Futures Commission. Institutions also need to maintain corresponding liquid funds. According to estimates, only 20% of the 60 OTC merchants currently meet the capital and related compliance requirements, and nearly 80% will face rectification, contraction, or exit.
Promoting OTC and custody regulation is an established direction for the regulatory authorities in Hong Kong. Previously, the "ASPIRe" virtual asset roadmap of the China Securities Regulatory Commission had clearly included it in the licensing supervision. The news of the framework being launched in 2026 is the implementation of the roadmap and also in line with the legislative timetable previously announced by the Finance Bureau and the China Securities Regulatory Commission.
In addition to capital requirements, the regulatory framework also strengthens risk control and investor protection. OTC merchants are required to comply with anti money laundering (AML) and customer due diligence (KYC) regulations, and can only conduct virtual asset and fiat currency spot transactions, with proper transaction tracing; The supervision of custody services is stricter, with a minimum paid up share capital of HKD 10 million, and it is necessary to strengthen wallet security and custody insurance mechanisms.
The implementation of regulation will trigger a reshuffle and integration in the OTC industry. Nearly 80% of merchants do not meet the standards, reflecting the current situation of many small and medium-sized institutions, weak funds, and insufficient compliance awareness in the market. These institutions need to increase capital, restructure or exit, and ultimately retain the top compliance institutions. In the short term, it may affect trading activity, but in the long term, it can purify the market, reduce risks, and attract compliant funds to enter.
Wu Jiezhuang emphasized that the key to the development of digital assets in Hong Kong is to balance compliance and innovation. This framework not only protects investors and prevents risks, but also leaves room for innovation. Regulatory agencies encourage the industry to proactively connect with the China Securities Regulatory Commission and the Hong Kong Monetary Authority to prepare for compliance.
As an international financial center, Hong Kong has launched measures such as the licensing of virtual asset trading platforms and the implementation of the Stablecoins Ordinance to establish a comprehensive regulatory system. The implementation of OTC and custody framework this time will fill the gap, achieve full regulatory coverage, and consolidate its leading position in the global digital asset field.
HongKong.info Committed to providing fair and transparent reports. This article aims to provide accurate and timely information, but should not be construed as financial or investment advice. Due to the rapidly changing market conditions, we recommend that you verify the information yourself and consult a professional before making any decisions based on this information.
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