I have bad news and good news, let's start with the bad news!

The bad news is: Virtual asset trading in Hong Kong is prohibited from providing services to residents of mainland China; the good news is: 40 brokerages, including Guotai Junan International, have obtained upgraded licenses to provide virtual asset trading services.


Guotai Junan International announced on June 25 that it upgraded its securities trading license (License No. 1) to include a comprehensive license for virtual asset trading services, becoming the first Chinese brokerage to obtain this permission.

Source: Guotai Junan International

The news triggered a strong reaction in the capital market. Guotai Junan International's stock opened up nearly 200%, reaching a nearly 10-year high, leading the Hong Kong brokerage sector to strengthen collectively, and the A-share stablecoin concept became active again. Many mistakenly believe that this indicates a trend toward the legalization of virtual currencies in mainland China, and that mainland investors can directly buy and sell virtual currencies through brokerages, leading to significant misunderstandings.

1. The Hong Kong Securities and Futures Commission (SFC) prohibits platforms from providing services to users in mainland China.

The Hong Kong Securities and Futures Commission (SFC) repeatedly emphasizes in all its virtual asset regulatory policies:

All licensed platforms and brokerages mustactively identify and prevent mainland Chinese users from registering and trading, including blocking IPs, mobile phone location identification, address verification, etc.

Source: SFC

Even if you are a mainland citizen who opened a Hong Kong stock account, you cannot use the virtual asset trading services of that brokerage. This policy applies to virtual currency exchanges like HashKey and OSL, as well as to Chinese brokerages like Guotai Junan and Huatai International. Watching a bunch of people in the crypto circle shout 'the bull market is coming', I can only silently say: mainland funds cannot come in, this 'bull' cannot run out of the circle.

2. Hong Kong users also do not need to trade virtual currencies through brokerages.

Currently, there are already 11 locally compliant virtual asset platforms in Hong Kong, including HashKey, OSL, etc. These platforms:

  • Lower transaction fees.

  • More supported currencies.

  • Provides on-chain token withdrawals, API, wallet binding and other functions.

In contrast, the brokerage's Omnibus model:

  • Transaction fees are higher (broker + platform) charged twice.

  • Cannot withdraw tokens, assets are held in a unified account by the brokerage.

  • Does not support on-chain addresses, DeFi, orders, API and other functions.

  • Cannot withdraw or transfer like a virtual currency exchange.

Source: SFC

  • Hong Kong users do not need to pay more fees to be taken advantage of.

3. Brokerages are not building exchanges, but are acting as agents.

Brokerages like Guotai Junan do not build centralized exchanges (CEX) themselves; they are simply:

  • Open 'institutional comprehensive accounts' with platforms like HashKey and OSL.

  • After customers place orders, the brokerage will transfer the orders to these platforms.

  • Essentially, this is a 'proxy buying and selling' of virtual currencies, acting as an intermediary.

Customers are not direct users of the platform, they don't even have their own on-chain addresses. Let alone withdrawing tokens, doing LP, placing orders, or using APIs to integrate bots.

This is a service with limited functions and higher costs for proxy buying.

4. This is a signal of compliance development, not the starting point of a retail investor bull market.

Since 2018, Hong Kong has gradually included virtual assets into regulation, and in 2024, it will launch Bitcoin and Ethereum spot ETFs. Now, brokerages participating is just a step in the compliance process:

  • Helps enhance market confidence in the mainstreaming of virtual assets.

  • Favorable for Chinese brokerages to layout a compliant financial future in advance.

  • But this does not mean that regulation on mainland investors is relaxed.

  • Encouraging broker participation is worthwhile, but has limited impact on market structure.

✅ In summary:

The acquisition of virtual asset licenses by Guotai Junan and other Chinese brokerages represents a further step toward the compliance of Hong Kong's crypto market, but it is not a channel for mainland retail investors. While there may be optimistic sentiments in the market, do not misinterpret the policy's bottom line. The compliance of virtual currency trading platforms in mainland China does not mean a path to wealth for mainland retail investors. The Hong Kong and US stock markets are more open, and as retail investors, they can still be harvested. Opening virtual currency exchanges will only lead to harsher harvesting.