Hong Kong tightens crypto reporting rules to boost ‘market integrity’

Hong Kong-licensed crypto firms will face stricter reporting rules, a move regulators believe will improve “market integrity” and confidence. 

In a joint statement on the 28th of September, Hong Kong’s Securities and Futures Commission (SFC) and Accounting and Financial Reporting Council (AFRC) signed an agreement to officially bring crypto firms under the traditional reporting framework. 

According to the arrangement, SFC-licensed virtual asset service providers (VASPs) will be strictly audited, covering corporate balance sheets, proof-of-reserves, and internal compliance reporting.  

Additionally, the framework provides an avenue for regulatory inspections and investigations for compliance. 

It (MoU) establishes a comprehensive framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations in matters of mutual regulatory interest.

Overall, this will optimize market oversight. Notably, Ms. Julia Leung, SFC CEO, echoed a similar stance, citing the need to “evolve with market dynamics.”

This MoU ensures our supervision evolves with market dynamics. Deepening our regulatory cooperation across financial sub-sectors is essential to upholding the quality of financial reporting and bolstering the confidence of global investors in Hong Kong’s regulatory system.