Asset Managers in Hong Kong Resist Stricter Digital Asset Regulations

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A securities industry body in Hong Kong is challenging proposed regulatory changes for cryptocurrency investment, contending they could push traditional asset managers away from the digital asset space.

The Hong Kong Securities and Futures Professionals Association formally objected in a Tuesday filing, specifically targeting the removal of an existing allowance for Type 9 licensed asset managers. Under current rules, these managers can invest under 10% of a fund’s total assets in crypto without an additional license.

According to the HKSFPA, the new rules would revoke this threshold. This means any allocation, however small—for instance, a 1% position in Bitcoin—would require managers to obtain a full virtual asset management license.

The industry group criticized the measure as a disproportionate “all-or-nothing” strategy. They warn it imposes undue compliance burdens relative to the actual risk and will discourage initial forays into crypto by traditional firms. The pushback occurs despite the regulatory proposals already moving forward, with authorities finalizing conclusions after a public consultation that began last summer.