Multiple Hong Kong-based securities firms—including Victory Securities and Eddid Securities—have completed Type 1 license upgrades to offer virtual asset distribution services, according to industry sources familiar with regulatory applications. This move signals growing institutional participation, with more brokers expected to enter the market under Hong Kong Securities and Futures Commission (SFC) oversight.
How Brokerage Distribution Services Work
- Licensed Partnerships: Brokers operate as distribution channels by integrating with SFC-licensed exchanges (e.g., BTC/ETH trading), not as independent cryptocurrency exchanges.
Compliance Framework:
- Strict client due diligence (KYC) and investor education protocols
- Prohibition of services to mainland Chinese residents
- Exclusion of high-risk altcoins or unregulated tokens
👉 Explore SFC-licensed trading platforms
Regulatory Landscape in Hong Kong
| Aspect | Regulator | Key Principles |
|---|---|---|
| Virtual Asset Trading | SFC | "Same business, same risks, same rules" approach with enhanced technical standards |
| Stablecoin/Payment Systems | HKMA | Oversight of digital港元 and stablecoin projects |
Advantages Over Offshore Exchanges (e.g., Binance, OKX)
Safety Measures:
- Client assets held under professional custody with insurance coverage
- SFC-approved token listings to filter out speculative assets
Compliance Standards:
- Rigorous AML/KYC procedures
- Full adherence to Hong Kong laws for transaction legitimacy
Future Market Outlook
The entry of brokers like Guotai Junan International highlights a trend toward institutional-grade virtual asset services. Industry analysts predict:
- Expansion of licensed distribution networks
- Tighter collaboration between traditional finance and regulated crypto platforms
👉 Learn more about compliant crypto trading
FAQ Section
Q: Can mainland Chinese investors access these services?
A: No—SFC-licensed brokers explicitly block mainland residents from participation.
Q: What cryptocurrencies are available through brokers?
A: Only major compliant tokens (e.g., BTC, ETH) approved by the SFC.
Q: How do broker-distributed services differ from unregulated exchanges?
A: They enforce higher asset-protection standards and legal transparency, minimizing fraud risks.
Q: Will more brokers join this market?
A: Yes, as Hong Kong’s virtual asset framework matures, additional upgrades are expected.
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