Hong Kong Expands Crypto Margin Financing With Bitcoin and Ether Collateral

TLDR

• Hong Kong now allows crypto perpetual contracts, but only for professional investors.
• Licensed platforms must follow strict leverage and risk management controls.
• Brokers can offer crypto margin financing using Bitcoin and Ether as collateral.
• The SFC prioritizes liquidity, price discovery, and market quality in 2026.
• New rules aim to deepen institutional crypto activity without expanding retail risk.

Hong Kong’s Securities and Futures Commission (SFC) has set out new guardrails that expand regulated crypto trading tools for professional investors. The package covers crypto perpetual contracts on licensed platforms, wider crypto margin financing options for licensed intermediaries, and stricter liquidity rules for affiliated market makers.

SFC clears crypto perpetuals for professional investors

The SFC’s new framework allows licensed virtual asset trading platforms to offer crypto perpetual contracts to professional investors only. Platforms must control leverage, set clear margin requirements, run orderly liquidation processes, and improve product disclosures.

The SFC also tied the framework to firm-level controls and ongoing supervision. In a Consensus Hong Kong 2026 synopsis, SFC Executive Director of Intermediaries Eric Yip described a “principles-based model” for leveraged perpetual contracts that requires strong risk management. He listed valuation, margining, liquidation protocols, and insurance-fund governance as core design areas.

Margin financing expands as bitcoin and ether qualify collateral

Alongside the derivatives framework, the SFC issued supervisory guidance that allows licensed intermediaries to provide financing for crypto asset trading with broader collateral options. The guidance explicitly references bitcoin and ether as virtual assets that firms may accept as collateral, subject to client suitability checks and internal risk controls.

The regulator also framed the change as a controlled way to support more professional activity without loosening core safeguards. Public reporting of the announcement noted that the SFC plans to start with Bitcoin and Ether, given volatility, while applying risk management standards similar to traditional margin lending.

Liquidity and market quality take priority under the SFC’s 2026 agenda

The SFC linked the initiatives to a market-quality agenda that prioritizes liquidity and price discovery. In its published synopsis from Consensus Hong Kong 2026, Eric Yip said the regulator’s focus for 2026 is “liquidity—cultivating market depth, strengthening price discovery, and building investor confidence.”

The SFC also clarified when affiliated entities may act as market makers on licensed crypto platforms. The synopsis describes requirements that target conflicts of interest, data security, information barriers, and functional independence, while still aiming to narrow spreads and improve transparency.

Market participants framed the changes as steps to reduce liquidity fragmentation inside the licensed regime. HashKey Group researcher Tim Sun said the measures help licensed exchanges access broader market depth through compliant channels. Futu Group executive Sherry Zhu said the updates support closer integration between traditional securities infrastructure and regulated crypto products. 

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