HK Regulators Expand Financial Oversight to Crypto Firms

Hong Kong's regulators have expanded their oversight of financial reporting to include crypto firms. The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a Memorandum of Understanding on September 28 that formalizes audit, compliance, and financial reporting cooperation for the sector.

The agreement replaces a previous MoU from February 2021, which only covered traditional financial entities. By extending oversight to licensed virtual asset service providers (VASPs), Hong Kong's regulators are signaling that crypto firms will face similar scrutiny as stock brokers and fund managers.

The updated MoU establishes formal arrangements across three critical regulatory functions: information sharing between the SFC and AFRC, case referrals when one body identifies issues that fall under the other's jurisdiction, and coordinated enforcement activities when investigations span both agencies' territories.