Hong Kong regulator approves crypto margin financing and perpetual contracts

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Hong Kong backs structured crypto growth

Margin financing and perpetual contracts framework

Under the updated regime, licensed brokers offering virtual-asset dealing services may extend financing to securities margin clients, provided there is sufficient collateral and robust investor safeguards. The SFC said bitcoin and ether may be accepted as collateral, subject to client suitability assessments and internal risk controls.

For licensed VATPs, the regulator outlined requirements for offering perpetual contracts — leveraged instruments that do not expire — exclusively to professional investors. Platforms must implement strict risk management measures, including leverage limits, margin requirements, liquidation mechanisms, enhanced disclosures and adequate internal controls. The products will remain subject to ongoing regulatory supervision.

The SFC also clarified that affiliates of licensed platforms may act as market makers, provided strong governance, disclosure and surveillance safeguards are in place to mitigate conflicts of interest.

“Our structured development approach based on the ASPIRe Roadmap is essential to scaling our digital asset market,” said Dr Eric Yip, the SFC’s Executive Director of Intermediaries. “These targeted initiatives to enhance liquidity showcase the SFC’s unswerving commitment to developing Hong Kong’s digital asset market in a sustainable and collaborative manner.”

Liquidity and market quality in focus

Speaking at Consensus Hong Kong, Yip emphasized that the regulator’s priority is not rapid expansion but market depth and stability. “[This] year's focus is on liquidity — cultivating market depth, strengthening price discovery, and building investor confidence through a strategic blend of expanded access and responsible product innovation,” he said.

Market participants described the move as an incremental broadening of product offerings rather than a regulatory pivot. Tim Sun, senior researcher at HashKey Group, said licensed exchanges have begun to “systematically address the long-standing issue” of liquidity fragmentation. “By accessing global market depth through compliant channels, the market can improve efficiency and price quality, laying the groundwork for the next phase of commercial development,” Sun added.

Sherry Zhu, global head of digital assets at Futu Group, said the measures demonstrate “Hong Kong's continuous innovation in the regulation of virtual assets,” citing cross-collateralization, perpetual contracts and affiliated market making as steps toward closer integration between traditional finance and crypto.

Conclusion

Hong Kong’s SFC has expanded margin financing and introduced a framework for crypto perpetual contracts limited to professional investors. The measures emphasize liquidity, risk controls and investor safeguards rather than rapid market expansion. By linking traditional securities infrastructure with regulated digital-asset products, the regulator is seeking to deepen market depth while maintaining oversight.

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