Hong Kong Expands Oversight of Crypto Firms Through New Regulatory Agreement

Hong Kong regulators have expanded their oversight of financial reporting to include licensed cryptocurrency firms. The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a new memorandum of understanding (MoU), which replaces an existing agreement between the SFC and the Financial Reporting Council, renamed AFRC in 2022.

The MoU extends regulatory cooperation to financial and compliance reporting by SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies, and authorized funds. It also covers related audit and assurance work, as well as information sharing, case referrals, mutual assistance, coordinated inspections, and investigations.

SFC Chair Kelvin Wong said the expanded cooperation would provide 'more comprehensive oversight' across a broader range of entities and activities in Hong Kong's financial sector. This development comes as Hong Kong continues to expand its digital asset regulatory framework, with new rules for crypto advisory services outlined in January.