Hong Kong lawmaker Johnny Ng has publicly backed the city’s latest move to strengthen regulation of crypto trading and custody services. His comments followed the launch of a new consultation by the government aimed at expanding oversight of digital asset activities.
本人歡迎香港特區政府財經事務及庫務局就推動數字資產交易有新發展！特區政府宣佈就數字資產交易及托管服務的立法建議正式進行諮詢，代表進一步釐清相關數字資產監管活動，也回應了市場的需求和想法。…
— Johnny Ng 吴杰庄 (@Johnny_nkc) December 25, 2025
Johnny Ng said the initiative marks clear progress in defining how crypto and digital asset services should operate under Hong Kong law. He added that the framework responds to market demand while improving safeguards for the public.
Consultation Targets Trading and Custody Services
The consultation was jointly released by the Financial Services and the Treasury Bureau and the Securities and Futures Commission. It outlines legislative proposals to introduce licensing regimes for virtual asset trading and custody service providers. According to the consultation summary, the aim is to bring these services under a formal regulatory structure.
Trading services would follow a framework similar to traditional securities dealing. Custody services would focus on safeguarding client assets, especially private keys. The authorities said this step builds on the virtual asset trading platform licensing regime introduced in June 2023. They described regulation of trading and custody as a logical next phase for the sector’s sustainable development.
Johnny Ng Highlights Compliance and Anti-Fraud Benefits
In his public remarks, Johnny Ng emphasized two main benefits of the proposed legislation. First, it would formally recognize the compliant status of crypto over-the-counter trading and custody services. This would allow legitimate firms to operate with greater clarity. Second, Johnny Ng said the framework would help authorities crack down on suspected fraud.
Some illegal schemes, he noted, operate under the guise of crypto trading or custody. Clear rules would make enforcement easier and reduce the risk of losses for citizens. He encouraged industry participants to submit feedback during the consultation period. According to Johnny Ng, broader input can help refine policy and support Hong Kong’s long-term Web3 development.
Industry Feedback Shapes the Framework
The consultation summary revealed strong market engagement. During an earlier two-month consultation that ended in August 2025. Regulators received over 100 submissions from industry groups, professional bodies and individuals. Most respondents supported expanding regulation beyond trading platforms to include crypto trading services and custody providers.
However, they also asked for clearer definitions, reasonable transition periods and streamlined licensing processes. Regulators said they reviewed these suggestions carefully. Consequently, they plan to incorporate feedback into the final legislative proposals. Specifically, these updates are expected to reach the Legislative Council in 2026.
Next Steps for Hong Kong’s Crypto Rules
Alongside the consultation on crypto trading and custody, authorities also launched a separate one-month consultation. This covers licensing for virtual asset advisory services and asset management providers. Instead of bundling these services under trading licenses, regulators plan to regulate them under frameworks similar to traditional securities markets. This approach aims to clearly define which activities fall under which licenses.
Currently, the government is seeking input. The consultation remains open through January 2026. If approved, the proposals would further formalize Hong Kong crypto regulatory landscape. Johnny Ng’s endorsement signals political support for the direction of travel. Furthermore, as the process continues, industry and users will watch closely to see how the rules balance innovation with investor protection.
