Hong Kong Cracks Down on Crypto Firms with Tightened Financial Rules
Hong Kong's financial watchdogs have strengthened their grip on licensed crypto firms. The Securities and Futures Commission (SFC) and Accounting and Financial Reporting Council (AFRC) signed a new Memorandum of Understanding (MoU) to enhance financial reporting and audit checks for these companies.
The agreement replaces the 2021 MoU and brings closer scrutiny to corporate balance sheets, proof-of-reserves, and client-asset custody logs. Crypto firms with an SFC license must now undergo third-party assurance work on their financial records, including auditors' work.
Auditors will also come under the cooperation framework, allowing regulators to examine reporting issues more effectively. The move aims to spot problems early, reducing the risk of major exchange failures.
SFC Chairman Kelvin Wong said the wider cooperation would provide 'more comprehensive oversight' across Hong Kong's financial sector. AFRC CEO Janey Lai added that the stronger information-sharing system would help regulators identify emerging risks earlier.