Hong Kong’s Securities and Futures Commission (SFC) has introduced a sweeping set of regulatory updates aimed at expanding the city’s virtual asset market while maintaining strict risk controls.
?? HONG KONG TO ALLOW CRYPTO PERPETUAL TRADING
Hong Kong’s SFC chief says the city is working on rules to permit perpetual contracts on trading platforms.
This would finally allow investors to trade leveraged crypto derivatives in HK rather than through offshore exchanges. pic.twitter.com/kLnchomPtp
— Coin Bureau (@coinbureau) February 11, 2026
In guidance released on February 11, the SFC confirmed that licensed virtual asset brokers will now be allowed to offer margin financing for crypto trading, established a formal regulatory framework for perpetual futures contracts for the first time, and permitted affiliated companies of licensed exchanges to act as market makers.
The measures mark a significant step in Hong Kong’s effort to build a fully regulated and competitive digital asset ecosystem.
Licensed Brokers Can Offer Crypto Margin Financing
Under the updated rules, licensed virtual asset brokers may provide financing services to existing securities margin clients who wish to trade cryptocurrencies.
However, the SFC has imposed strict eligibility requirements:
Clients must demonstrate strong creditworthiness
Sufficient collateral is required
Collateral may include both securities and virtual assets
Initially, only Bitcoin (BTC) and Ethereum (ETH) qualify as crypto collateral
Robust investor protection mechanisms must be in place
The regulator stated that the move is designed to enhance market liquidity while ensuring risk remains tightly managed. By allowing financially sound clients to access virtual asset financing, Hong Kong aims to deepen institutional-grade participation in crypto markets.
Hong Kong Introduces Its First Framework for Perpetual Contracts
In a landmark development, the SFC has established a high-level regulatory framework governing perpetual contracts on licensed virtual asset trading platforms.
Perpetual contracts have previously been absent from Hong Kong’s regulated environment. Key elements of the framework include:
Access limited to professional investors only
Initial products restricted to Bitcoin and Ethereum contracts
Clear risk disclosures and transparent product design required
Platforms must maintain systems capable of handling extreme volatility and liquidation events
The SFC emphasized that the objective is not to encourage speculation but to enable professional investors to implement risk management strategies and enhance spot market liquidity.
Affiliate Market Makers Now Permitted
To further strengthen liquidity, the SFC will now allow affiliated entities of licensed virtual asset trading platforms to act as market makers on their own platforms.
Strict safeguards must be implemented to mitigate conflicts of interest, including:
Operational independence of market-making divisions
Strong internal control systems
Ongoing monitoring of trading activities
This move is expected to increase liquidity channels while maintaining regulatory integrity.
“Step-by-Step” Development Strategy
Dr. Eric Yip, Executive Director of Intermediaries at the SFC, said the measures align with Hong Kong’s ASPIRe roadmap and reflect a phased, sustainable approach to digital asset development.
SFC CEO Julia Leung also announced the initiatives during CoinDesk Consensus Hong Kong 2026, reinforcing the city’s ambition to build a comprehensive virtual asset ecosystem.
Most importantly, stablecoin licensing is expected to begin as early as March this year, signaling further expansion of Hong Kong’s regulated crypto framework.
The SFC stated it will closely monitor implementation and continue engaging with industry stakeholders to ensure the measures support a safe, competitive, and sustainable digital asset market.
