In 2026 Hong Kong has fully implemented a licensing system for cryptocurrency OTC (over-the-counter) trading, and OTC platforms that are not approved by the SFC are illegal to operate. For retail investors, the three main ways to legally trade USDT in 2026 are:
A. Use licensed exchanges (OSL, Victory Securities, HashKey) to bind a local bank to access the funds;
(b) Through a licensed brokerage firm or wealth management company;
C. Use of offshore platforms or digital bank accounts (gray channel, be careful).
This article will cover the latest OTC regulatory situation and the current methods by which Hong Kong people can safely and conveniently access their funds!
2026 Complete Comparison of Cryptocurrency Trading Platforms in Hong Kong (4 Major Licensed)
The Hong Kong government has officially brought virtual asset OTC trading platforms and foreign exchange services under the licensing supervision of the SFC without any transitional period. This means that from the date of the policy announcement, it will be an offense to operate without a license, punishable by up to 7 years imprisonment and a fine of HK$5 million.The government has emphasized "zero tolerance" for unlicensed operations, with fines accruing on a daily basis for persistent violations, making such stringent regulation almost tantamount to a raiding order on traditional underground OTC money changers.
The new regime requires all operators offering cryptocurrency trading exchange to apply for two licenses, namely the "Virtual Asset Trading License" and the "Virtual Asset Custodian License", and to meet stringent compliance requirements for cold wallet/hot wallet management, customer identification (KYC), segregation of funds, anti-money laundering (AML), and so on.
How will the Hong Kong Stable Currency Ordinance 2026 affect retail investors?
On 1 August 2025, Hong Kong also implemented the Stabilized Currency Ordinance in tandem with the establishment of a new licensing regulatory framework for stabilized currency issuers.
Any institution that issues stable money in Hong Kong or promotes stable money products to the Hong Kong public must be licensed by the HKMA. It is worth noting that the scope of regulation is not limited to local issuers in Hong Kong. Stable money issued outside Hong Kong but anchored in Hong Kong dollars or marketed to the Hong Kong market is also required to be licensed, thus effectively plugging the regulatory arbitrage loophole.
The threshold for license application is extremely high: applicants are required to meet a minimum paid-up capital requirement of HK$25 million and demonstrate a sound risk management system and a competent corporate governance structure. The HKMA has made it clear that only a small number of licenses will be granted initially, taking into account the emerging nature and risk factors of stable money. Dozens of organizations have already applied for the licenses, including Jingdong Money Chain Technology (Hong Kong) Company Limited, Elements Innovative Technology Company Limited, Standard Chartered Bank (Hong Kong) Limited, Amwill Group Limited, Hong Kong Telecommunications (HKT) Limited, and others.
To prevent the recurrence of events similar to the Terra storm, the Ordinance requires that the stable money be 100% backed by highly liquid assets (e.g. cash, short-term treasury bonds, etc.), and that the reserve assets be segregated from the issuer's other assets and audited by an independent third party. This design ensures that stablecoin holders can redeem the coins at par at any time, avoiding the risk of a run on the reserves. The redemption mechanism is also strictly regulated. Unless otherwise authorized, a licensed issuer should complete the processing of valid redemption applications within one business day.
Most notably, the new regulations for stabilized currency regulationStabilized currency issuance and advertisement promotionThe OTC exchange program is not specifically designed to regulate OTC exchanges.
After the introduction of the Stabilization Ordinance, can the OTC still operate at present?
Following the introduction of the Stable Currency Ordinance on August 1, 2025, a number of Hong Kong's leading OTC operators have recently indicated that they will continue to operate as normal. For example, some OTC platforms have revealed that they will make some adjustments to their trading processes, but their basic services will remain unchanged for the time being. The operators concerned may be keeping a low profile, and you need to consult privately for specific trading arrangements. How long such modifications can be sustained in the face of the draconian laws remains uncertain, and investors need to weigh the risks involved.
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Prior to the tightening of regulations, a large number of cryptocurrency OTC transactions in Hong Kong were conducted through informal channels. At that time, many merchants such as CryptoHK, One Satoshi and HKD.com even developed a semi-financial service model, with professional counters and real-time exchange rate displays in their stores, which made it convenient for users to bring cash to buy and sell Bitcoin or USDT, and then convert it to Hong Kong Dollar cash. These stores usually do not require bank transfers or ask for the source of funds, and the convenience of instant cash exchange has attracted many investors.
In addition to street-side swap stores, many Hong Kong people used to buy and sell stablecoins such as USDT through online over-the-counter (OTC) transactions.
For example, finding buyers/sellers on P2P platforms for international exchanges such as Binance, exchanging USDT using local bank transfers, or contacting a private intermediary directly in a Telegram group to exchange. Due to the previous lack of local licensed exchanges open to retail investors in Hong Kong, these methods have become mainstream: no strict KYC scrutiny is required, and exchanges are fast and private.
At that time, the drawbacks were also obvious: transactions were based solely on creditworthiness and lacked regulatory protection, and buyers and sellers might be exposed to the risk of exchange rate loss or fraud. In addition, this type of underground trading has long been in the gray area, and once disputes or frauds arise, it is often difficult for investors to recover their losses.
How will OTC regulation evolve in Hong Kong from 2026 to 2027?
A large number of OTC stores that failed to comply with the regulations in time will disappear, and only a very few qualified and licensed operators will remain. The era of street-side "USDT swapping" will be officially over. This means that it will no longer be possible to walk into a corner store and buy coins anonymously with cash or find someone to exchange them via Telegram. However, this does not mean that it will be impossible to convert cryptocurrencies back to fiat or buy cryptocurrencies from now on.The only thing is that the method and channel of withdrawal must be transferred to a compliant channel.
It is expected that the vast majority of transactions will be conducted through licensed platforms or financial institutions in the future, and investors will need to adapt to the new process of providing identity verification and complying with anti-money laundering regulations. In the short term, some people may still try to continue to operate in the dark in the form of "buying USDT on behalf of others" or collecting coins privately off-market, but under the strict laws, the risk is much higher than the reward, and once they are targeted by law enforcement agencies, the consequences will be very serious.
Therefore, we can foresee that a professional and transparent compliance channel will become the only reliable way to deposit and withdraw cryptocurrency in Hong Kong.
How should retail traders react to the new stablecoin regulations?
With the implementation of the new Stable Currency Regulation, many investors have questions about whether they are in compliance with the regulation. We would like to answer some of the most common concerns:
Is it illegal to talk about or hold stablecoins like USDT?
The Stabilized Currency Ordinance mainly regulates the act of offering or actively promoting "specified stable coins" (e.g. USDT, USDC, etc.) to the public in a business capacity. In other words, if a person or an organization solicits, offers to buy or sell, distributes or advertises a stablecoin to the public without a licence, he/she commits an offence.
It is not illegal for individuals to mention the name of stablecoins, discuss their use or share information in their daily communication. The Ordinance itself focuses on the operation of licensed stablecoin issuers and does not specify the legal liabilities of retail investors for the use of stablecoins. Therefore, as with the previous licensing requirements for virtual asset exchanges, there are still many blind spots and gray areas in the Ordinance for individual investors.
Is it illegal to use stable currencies or P2P through overseas exchanges?
There is no explicit provision prohibiting retail traders in Hong Kong from holding or using stable money for trading. In fact, a large number of organizations and individuals in Hong Kong use USDT, USDC, etc. as settlement instruments on a daily basis, and it is unlikely that the regulatory authorities will be able to eliminate all retail traders who normally hold or use stable coins.
With Binance, etc.Not licensed in Hong KongFor example, every time a user logs on to an international trading platform, he or she will see a reminder that "Hong Kong users are not legally allowed to use the platform", but the platform does not actually prevent Hong Kong users from trading, which is a bit like the age confirmation reminder that pops up when you enter a certain website, which is meant to be self-protection rather than a real block.
Since the introduction of licensed virtual asset exchanges in Hong Kong, many local crypto players have continued to trade cryptocurrencies through platforms such as Binance. With the introduction of the Stablecoin Ordinance this year, the situation is unlikely to change much in the short term, depending on what Binance or other unlicensed overseas platforms do in the future.
The average investor who buys, sells and holds stablecoins for personal use only.For the time being, there is no obvious risk of violation of the law.In short, the Ordinance has just come into effect. All in all, the Ordinance has just come into effect, and many details are yet to be further interpreted by officials and professionals. If you don't want to get into unnecessary trouble, you should avoid engaging in gray area activities at this stage and wait and see what happens. At the same time, you can prioritize and consider the compliant channels introduced below to protect your assets.
What are the three most compliant methods of withdrawing and depositing funds in 2026?
After the tightening of regulations, although the traditional OTC deposits are almost blocked, there are still legal ways to exchange fiat currencies with cryptocurrencies. Here are 3 safe and relatively convenient ways to deposit and withdraw funds:
1. Use of licensed exchanges, bonded local banks to access funds
The most direct way is to switch to a licensed cryptocurrency exchange approved by the Hong Kong SFC. There are already two licensed virtual asset trading platforms in Hong Kong that are open to retail. For example, you can use the OSL exchange to open an account first, bind your personal local bank account to the exchange wallet, and then you can deposit funds directly in Hong Kong dollars.
Some platforms already support local banks' Hong Kong Dollar Fast Payment (FPS) and US Dollar wire transfers, which allow for faster fund transfers. Although a more stringent KYC process is required for registration, under the new regulations, these platforms will be able to provide a more efficient way of transferring funds to and from banks.Licensed Exchange + Bank ModelIt has become the mainstream access channel.
OSL Account Opening Tutorial: HK Complete Process for Licensed Deposit and Withdrawal of Funds
Introduction to OSL Exchange: Security and Features
Example operation:
Assuming you are a newbie who wants to safely enter the cryptocurrency scene to buy BTC or ETH, but have never used any Hong Kong licensed platforms, you can register with a legitimate trading platform such as OSL or Victory Securities.
以 OSL Exchange For example, you can deposit HKD into your OSL trading account via FPS or bank transfer, and then buy USDT, BTC and other crypto assets instantly; conversely, you can also sell cryptocurrencies in exchange for HKD and withdraw them back to your bonded bank account. These platforms are regulated by the Securities and Futures Commission (SFC), with clear custodianship and segregation of funds, and transparent transaction records, which can effectively protect investors' assets.
If you don't know how to go from FPS deposits to transferring money to theUSDT on the link wallet, definitely recommend you to refer to it!2026 Beginner's Guide｜How to transfer USDT? From bank deposit to wallet receipt of coins complete instruction》This hands-on instructional article, whichYou will be taken through the process step by step!
You can also refer to our compilation of OSL Teaching Learn how to open an account and how to operate the deposit/withdrawal process!
How to exchange HKD for USDT?
Even if some of the stabilized currencies are not allowed at that time, investors may still take the following actionsCurrently the most viable option under the Compliance Framework：
If you've already transferred HKD to OSL via FPS, the next step is to buy a mainstream cryptocurrency (such as BTC or ETH), withdraw it to your wallet, and then convert it to the desired stablecoin via a chain transaction. Although this is a little more cumbersome than the old practice of buying USDT and withdrawing it in HKD in a one-stop store at an OTC store, it is a viable and compliant alternative in the current regulatory environment. Overall, depositing and withdrawing funds through a licensed exchange is still the best way toThe safest and most secure at the moment.The choice.
2. through licensed brokerage firms or wealth management companies
Another compliant channel to access funds is to use licensed securities dealers. With the liberalization of policies, many traditional financial institutions have started to engage in virtual asset trading. Some Chinese brokers (e.g. Guotai Junan International) have successfully upgraded and obtained authorization to provide virtual asset trading services, which can provide customers with crypto asset trading and fund clearing, and assist users to legally transfer funds in and out.
Veteran Hong Kong-funded brokerage firm Victory Securities It is also the first to complete the relevant license upgrade and become one of the first batch of licensed brokers in Hong Kong to provide virtual asset trading services.
This means that investors who have accounts with these brokers can trade virtual assets such as Bitcoin and Ether through the brokers' platforms or apps in compliance with regulatory requirements, and the brokers will directly handle the debiting and crediting of funds. Many high net worth investors have turned to brokerages to trade cryptocurrencies.
以 Victory Securities For example, it claims to provide one-stop cryptocurrency investment solutions. Through Victory Securities' compliant platform, users can directly trade mainstream crypto assets such as Bitcoin and Ether in Hong Kong Dollars or US Dollars, without the need to convert their funds into stable currencies first (the system will automatically connect to the liquidity of international exchanges behind the scenes). This greatly simplifies the trading process, while all transactions are conducted under a regulated framework with clear and traceable flow of funds.
Readers who are interested may refer to our Victory Securities Teaching Learn how to use the brokerage channel to access funds. By using licensed brokerage firms for deposit and withdrawal, you can not only enjoy the reputation and services of traditional financial institutions (e.g. professional customer service, clear statements), but also comply with Hong Kong laws, which can effectively reduce future policy risks.
3. Use of offshore platforms or digital bank accounts (gray channel, caution required)
In addition to the above local compliance methods, some users may consider making a detour offshore for fund transfers. However, such methods are in the regulatory gray area and carry higher risks.Not a major recommendationThe typical practice is to open an overseas digital bank or offshore bank account. Typical practice is to open an overseas digital bank or offshore bank account, such as Revolut in the United Kingdom and Wise in the United States, or to set up a bank account in Singapore, Dubai, and so on.
The funds are then transferred to these offshore accounts and exchanged between coins and fiat currencies through international crypto platforms. For example, some people will transfer Hong Kong dollars to an overseas account, buy USDT on an overseas exchange with the funds in the account, withdraw USDT back to their own wallets, and when they need to withdraw the funds, sell USDT back to the overseas account on the exchange for local fiat currency, and then finally send the money back to Hong Kong via bank wire transfer. During this process, the funds are bypassed overseas, thus avoiding the immediate attention of local regulators to a certain extent.
However, it should be emphasized thatThis type of "curved deposit/withdrawal" is potentially risky!Firstly, you must have a thorough understanding of the laws and regulations of the relevant offshore jurisdictions to ensure that these operations do not contravene local and Hong Kong regulatory requirements. Secondly, frequent transactions involving large sums of money or for commercial purposes are likely to attract the attention of banks or regulatory authorities, and your fund movement records may still be scrutinized. Furthermore, by conducting P2P off-exchange transactions through other platforms (e.g. Binance), you are still exposed to the risks of unknown counterparties, fraud, and account freezes. In addition, if your counterparty is physically located in Hong Kong and is not licensed to operate, you could theoretically be in violation of the law.
In conclusion, this type of bypass is only a stop-gap measure for a very small number of specific situations and is not recommended for large or high profile operations. Under the new regulatory environment, the vast majority of investors should prioritize the aforementioned local compliance channels in order to avoid making a big mistake!
Conclusion
For the average Hong Kong investor, rather than risking the legal risks of continuing to access funds in the gray area, it is better to actively adapt to the new regulatory era and choose legal channels for funds exchange. In the long run, compliant channels will not only be safer, but will also gradually improve the quality and transparency of services, making the experience of accessing funds more convenient.
It is worth mentioning that although there are still a lot of unanswered questions about the new policy on stable money regulation, officials are bound to provide more guidance in the future. During this transitional stage, investors should remain cautious and patiently observe the market changes. At the same time, investors should make use of the above compliance channels to deposit and withdraw funds in order to capitalize on the new opportunities in the cryptocurrency market under the premise of safeguarding their assets.
Frequently Asked Questions
My previous USDT purchase from a non-licensed OTC, will it still be safe in 2026?
A: Non-licensed OTCs will be illegal in 2026. USDT already held will not be confiscated, but it is recommended to transfer your assets to a licensed exchange or self-hosted wallet to be on the safe side.
Is it legal to buy USDT on offshore exchanges like MEXC or on these platforms?
A: Hong Kong's regulation focuses on platforms that "actively provide services to Hong Kong retail investors". Offshore exchanges that do not actively promote their services to Hong Kong users and whose users access them on a voluntary basis are still in the "gray zone" in 2026 and have not yet been explicitly banned. However, as they are not protected by the SFC, users may lose their assets if the platform runs away or is sanctioned.
Is it legal to withdraw cash in USDT at crypto ATMs in Hong Kong?
A: It is legal to use Crypto ATMs to withdraw cash in USDT in Hong Kong, subject to regulatory requirements. Cryptocurrency is considered a legal virtual asset in Hong Kong and it is not illegal for individuals to hold or trade in it. However, with the tightening of regulatory policies in Hong Kong, you should be aware of the following when using Crypto ATMs:
- Real Name Certification (KYC): According to the Anti-Money Laundering Ordinance in Hong Kong, most of the crypto ATM operators now require their users to undergo account opening and identity verification by scanning their identity documents before they can carry out transactions.
- Operator Compliance: Institutions (including ATM operators) providing virtual asset trading services are required to comply with the requirements of the Securities and Futures Commission (SFC) in Hong Kong.
- Impact of new regulations: The Hong Kong government is gradually implementing a licensing regime for Virtual Asset Service Providers (VASPs) and a regulatory framework for stable currencies such as USDT. This means that in the future, only licensed organizations will be able to legally operate the relevant exchange business.
In addition to ATMs, you may also want to consider transferring USDT from a licensed exchange, such as OSL.Converted to BTC / ETH / SOL in personal wallet andWithdrawal to OSL.Then you can sell BTC / ETH / SOL for HKD and withdraw it to your local bank account, which is the most regulated and safe way!
Most Popular Cryptocurrency Trading Platforms
Hong Kong People's Top Choice for Bitcoin and Ether Trading 》 【2026 Introduction】OSL registration benefits, security, access to funds, introduction of features
Suitable for traditional Hong Kong investors to buy and sell stocks and currencies at the same time. [2026 Introduction] What is Victory Securities? Security, Deposit and Withdrawal, Features
More choices of contract currencies, suitable for buying fake coins in cash. Trade on MEXC and enjoy 500x leverage and many other benefits!
Disclaimer
The content of this article is for information sharing only and does not constitute any form of investment, legal or financial advice, nor should it be considered as an invitation or solicitation to readers to make any trading decisions. All information and opinions expressed herein reflect the current situation on the date of writing and are current in nature. Monsterblockhk does not guarantee their completeness or future applicability, nor does it represent the official position of this platform. The cryptocurrency market and regulatory regime are constantly changing, readers should exercise prudent judgment and risk on their own and consult a qualified legal or financial advisor for professional advice before proceeding with any deposit/withdrawal operations, platform usage or investment behavior. In addition, if this article or any content of this website involves a platform that has not yet obtained a license to operate a virtual asset trading platform in Hong Kong, including but not limited to textual descriptions, pictures, offers or events, the relevant information is for general reference only by persons residing outside the Hong Kong Special Administrative Region and does not constitute any promotion or recommendation to Hong Kong residents.