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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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The Securities and Futures Commission (SFC) of Hong Kong convened its inaugural Virtual Asset Consultative Panel (VACP) meeting today, marking a significant step in its regulatory engagement with the virtual asset industry.
The newly formed panel, which consists of senior representatives from all licensed virtual asset trading platforms (VATPs), will play a crucial role in shaping Hong Kong’s approach to digital asset regulation.
The VACP, chaired by Dr. Eric Yip, Executive Director of the SFC’s Intermediaries Division, aims to foster a sustainable and resilient virtual asset ecosystem.
The consultative panel will work alongside the SFC to establish regulatory priorities that balance market development with investor protections.
According to Dr. Yip, the VACP reflects the SFC’s proactive stance on fostering industry growth while maintaining compliance with necessary regulatory standards.
He added:
“The SFC looks forward to close collaboration with the members to encourage and develop innovation while ensuring adherence to regulatory standards in this rapidly changing landscape”
What is The Role of the Virtual Asset Consultative Panel?
The primary goal of the VACP is to create a structured framework for collaborating on regulatory policy formulation among regulators and industry stakeholders.
The panel will help the SFC identify critical areas for regulatory evolution by leveraging the insights and expertise of VATP representatives, ensuring a secure and innovative market environment.
Dr. Yip emphasized that the panel will facilitate open dialogue between the SFC and virtual asset service providers, allowing for more effective policy implementation.
He noted that as the digital asset sector rapidly evolves, regulatory frameworks must be adaptable to emerging trends while prioritizing investor protection.
Through ongoing engagement, the VACP will help bridge the gap between innovation and compliance, potentially setting the stage for future virtual asset developments in Hong Kong.
Crypto Hong Kong Future Outlook
The formation of the VACP comes as Hong Kong is positioning itself as a global hub for digital asset innovation.
The city’s regulatory approach, which balances oversight with industry participation, is expected to enhance investor confidence and attract further institutional interest.
The SFC is signaling its commitment to a transparent and collaborative regulatory environment by bringing VATPs and regulatory authorities together.
Based on community sentiment, the establishment of the VACP could lead to more structured policies regarding tokenized assets, decentralized finance (DeFi), and stablecoins.
Moreover, the consultative panel could serve as a model for other jurisdictions that want to refine their approaches to virtual asset regulation.
Notably, this happened just a few days after Hong Kong officially recognized crypto holdings as valid proof of assets for investment immigration under the New Capital Investment Entrant Scheme (New CIES).
This allows applicants to use Bitcoin (BTC) and Ether (ETH) to meet the HK$30 million ($3.8 million) residency requirement. The first crypto-based application was approved in October 2024, and the second was approved on February 7, 2025.
These applications, processed by the Hong Kong Investment Promotion Agency and Invest Hong Kong, required reports from certified accountants verifying the applicants’ crypto holdings.
However, while crypto can be used as proof of wealth, it remains unclear whether direct crypto investments or crypto-related financial products like ETFs will qualify under the program.
Applicants must secure their digital assets in cold wallets or reputable exchanges to ensure regulatory compliance.
On January 27, under strict compliance measures, the SFC also granted operational licenses to two local crypto trading platforms, PantherTrade and YAX.
Despite progress, the registration process for crypto firms remains slow, with only seven licenses issued since 2014.
