Hong Kong Crypto Firms Risk Shutdown Without Transition

Crypto News Regulation

Hong Kong Crypto Firms Risk Shutdown Without Transition, HKSFPA Says

Written by Aaron S.,

Editor-In-Chief

Last Updated: January 20, 2026

Key Takeaways

HKSFPA warned that Hong Kong’s new crypto licensing plan could force compliant firms to pause operations without a transition period;
The group urged regulators to grant a 6 to 12 month grace period for firms that apply before the rules take effect, to avoid disruptions;
Regulators are still consulting the public on the proposed crypto regimes, with no confirmed start date for implementation.

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Hong Kong Crypto Firms Risk Shutdown Without Transition, HKSFPA Says

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The Hong Kong Securities & Futures Professionals Association (HKSFPA) has cautioned that the city’s upcoming crypto licensing rules could force compliant firms to halt their operations if the rollout happens without a proper transition period.

The association explained that under the current plan, existing companies offering crypto-related services may be required to have full licenses from the first day the new rules take effect.

Without timely approval, they might be required to stop regulated activities while their applications are being processed.

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The Securities and Futures Commission, in collaboration with the Financial Services and the Treasury Bureau, is currently seeking public feedback on new licensing regimes.

While the HKSFPA supports the government’s goal of stronger supervision, it warned that launching the framework without a transition phase could cause serious disruptions.

The group noted that the application process is complex and could easily result in backlogs.

In its consultation paper, the HKSFPA urged regulators to include a period for companies that submit their applications before the rules take effect. This would allow them to continue operating while their applications are under review.

The HKSFPA wrote, "Legitimate businesses may be forced to suspend operations while awaiting approval. We strongly urge the government to implement a 6 to 12-month deeming period for existing practitioners who submit their applications prior to the commencement date".

Recently, the HKSFPA asked the government to adjust parts of its plan to apply new global crypto reporting standards from the OECD. What did the association say? Read the full story.