On 10 April 2026, the Hong Kong Monetary Authority granted the first two stablecoin issuer licences: one to The Hongkong and Shanghai Banking Corporation Limited, and one to Anchorpoint Financial Technology [a joint venture of Standard Chartered Bank (Hong Kong), HKT, and Animoca Brands].
In the first phase, the HKMA received applications from 36 institutions in total, and only two licences were issued in the first batch. As the news spread, many mainland teams treated Hong Kong as a new compliance gateway: Hong Kong has issued licences, so if the project is moved there, does that make it safe?
In fact, the answer is set out in two documents: the Hong Kong Stablecoins Ordinance and Yin Fa [2026] No. 42. The former determines to whom Hong Kong opens the door, while the latter determines which window the mainland closes.
I. Licences are not available to ordinary project parties
The Stablecoins Ordinance took effect on 1 August 2025. Section 14 limits applicants to two categories: companies incorporated in Hong Kong, or authorized institutions (regulated banks or financial institutions) incorporated outside Hong Kong that have a registered office in Hong Kong.
Section 15 and Schedule 2 impose further thresholds: paid-up share capital of HK$25 million; reserve assets covering 100% of the circulating face value, held in a segregated account and redeemable at face value at any time; and anti-money laundering, fit-and-proper persons, and local physical presence requirements, none of which may be omitted.
A look at the two approved institutions shows that the licensing regime screens for financial institutions, not start-ups. The Hongkong and Shanghai Banking Corporation Limited and Anchorpoint Financial Technology have both participated in the HKMA's central bank digital currency and tokenised deposit pilot projects. An ordinary Web3 start-up team that incorporates a Hong Kong company, rents an office and writes a white paper simply cannot come close to meeting the licensing threshold.
One further point should not be overlooked: the Ordinance regulates not only issuance within Hong Kong. Stablecoins issued in Hong Kong or elsewhere that claim to be pegged to the Hong Kong dollar must also apply for this licence.
II. A licence is not an authorisation to conduct business targeting the mainland
Suppose the licence were actually obtained. Could business then be conducted targeting mainland residents?
When HashKey opened to retail investors in August 2023, mainland email addresses and mobile phone numbers could not be used to register. The joint circular issued by the Securities and Futures Commission and the HKMA in December of the same year also listed the mainland as one of the jurisdictions in which the sale of virtual asset-related products is prohibited.
Although the Legislative Council's written reply of 10 September 2025 stated that regulated stablecoins issued by licensed issuers may be offered to retail investors, while non-regulated stablecoins may only be offered to professional investors, this refers to the Hong Kong market. On the mainland side, Document No. 42 expressly provides that overseas entities and individuals may not, in any form, unlawfully provide virtual currency-related services to mainland entities.
III. What About Using a Hong Kong Company as a Shell?
Article 6 (territorial jurisdiction) and Article 7 (personal jurisdiction) of the Criminal Law: if either the act or the result occurs within the territory, the mainland courts have jurisdiction; and where the actor is a mainland citizen, acts committed abroad that meet the conditions are equally pursued.
Part IV, Article (13) of Document No. 42 addresses precisely this matter: without the lawful and compliant consent of the relevant authorities, domestic entities and the overseas entities they control may not issue virtual currencies abroad. This provision governs not where the issuance takes place, but whether the issuer has a controlling relationship with the domestic territory; your current plan to register a Hong Kong company while retaining control domestically falls squarely within this provision.
This is not speculation; there is a real judgment: the case of Du Ling and others for the crime of organizing and leading pyramid selling activities [(2016) Su 0311 Xing Chu No. 16]: in mid-2014, Liu Xiong, Du Ling and others established Dakang Intelligent Technology Co., Ltd. in Hong Kong, with its headquarters in Hong Kong; in January 2015 they held a launch conference, receiving thousands of investors for an "inspection" while also setting up a branch in Shenzhen to develop the mainland market, and issued the so-called "Dark Coin," with more than 30,000 cumulative registered accounts in the mainland and nearly RMB 1.5 billion amassed; the Quanshan District People's Court of Xuzhou City sentenced them at first instance to fixed-term imprisonment ranging from eight years and six months to three years and six months.
The company was Hong Kong-based, the conference was held in Hong Kong, but the judgment was rendered in the mainland.
IV. If a Case Is Actually Filed, How to Defend
What we discussed above was how to help business owners avoid stepping into these pitfalls as much as possible; next, let us discuss how to defend a case if issuing tokens through a Hong Kong shell is investigated.
First, the "four elements"
The crime of illegal absorption of public deposits requires all four elements: illegality, publicity, inducement, and sociality. If any one is missing, illegal absorption is not established. In practice, the element most commonly challenged is inducement: whether the project party promised principal protection, repurchase, or repayment of principal and interest; where only appreciation prospects are publicized without any guarantee obligation, the treatment should be distinguished from that of promising fixed returns, as reflected in the reasoning portions of multiple judgments.
Second, the charge
If illegal absorption is established, such cases often hover among the crime of organizing and leading pyramid selling activities, the crime of illegally absorbing public deposits, and the crime of fund-raising fraud. The rule set out in Article 13 of the Interpretation on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal Fund-Raising is: where funds are illegally absorbed from the public by pyramid-selling means and the crime of organizing and leading pyramid selling activities is also constituted, conviction and punishment shall be determined in accordance with the provisions imposing the heavier penalty.
The aforementioned Du Ling case fell under the crime of pyramid selling, with sentencing across the case ranging from eight years and six months to three years and six months; if, after raising funds by issuing tokens, the funds are squandered or misappropriated, it is evaluated as fund-raising fraud, and where the amount is huge, a sentence of life imprisonment may be imposed; where the charge falls makes an entirely different difference in the sentencing tier.
Third, subjective knowledge and principal versus accessory liability.
Knowledge of what?They knew they were participating in fundraising directed at the unspecified public, and knew that this model is not permitted in the mainland. Prosecutors rarely prove "knowledge" directly; they rely more on inference: fund in-flow and out-flow records, community scripts, and tiered profit-sharing are all there, and a bare "I didn't know" can hardly escape liability. For marginal roles such as technical and administrative positions, the defense space lies precisely on the reverse side of that inference: how far the job duties are from the core fundraising function, whether the person received a fixed salary or tiered commissions, and whether the person had contact with fund flows and promotional scripts—these verifiable facts are far more powerful than a denial. With a Hong Kong company and a leased formal office, the prosecution may use them to argue strong organization; but viewed from another angle, a formal company with licensed business is precisely the source of the accused's genuine belief, and whether that misunderstanding had a basis and whether there was any opportunity to learn of the prohibition are likewise facts that should be ascertained in determining knowledge.The anchor for principal versus accessory liability is control.Those who initiate and establish the scheme, design the scripts, and control the fund pool cannot escape responsibility; those who are hired to execute, are paid per order, or join midway may fall within Article 27 of the Criminal Law as accessories and shall be given a lighter or mitigated punishment or be exempted from punishment.
Fourth, amounts and evidence.
In cases of this kind, what first bears down on the accused is often the enormous account turnover; but turnover, the amount involved in the case, the amount of the crime, and illegal gains are four distinct concepts and cannot be equated. Crypto-related transactions are especially prone to inflating turnover: the same principal can circulate several times in a day, and a few hundred thousand in principal can roll up into tens of millions within a few months; transfers between accounts and refunds followed by repurchases, each recorded once on the RMB side and once on the on-chain side, will continue to push the figure higher.
When it comes to the specific charge, the object of calculation changes again: illegal absorption of public deposits looks at the public funds absorbed, fundraising fraud looks at what was actually defrauded, the crime of assisting information network criminal activities looks at payment and settlement, and concealment and disguise requires first proving which funds are proceeds of the upstream crime.
The defense should not fixate on the total, but break the turnover back down into individual transactions: whether orders, exchange records, wallet addresses, and TxIDs can be matched, and whether normal business payments can be separated from the funds involved in the case.
The amount found in a judgment should fall only on the portion that the evidence can prove. Cases of overseas issuance and fundraising have an additional layer: where funds flow and are distributed overseas, the evidence chain is longer, and if any link is broken, the amount found should be reduced.
Lawyer's Observations
Hong Kong licensing is a Hong Kong matter; what mainland teams should see clearly is three points: the licensing threshold is generally beyond the reach of ordinary project parties; the effect of a license does not extend to mainland residents; and a Hong Kong shell cannot block mainland jurisdiction.
