Hong Kong Expands Financial Reporting Oversight to Licensed Crypto Firms

Hong Kong’s financial watchdogs have widened their working relationship to bring licensed crypto companies under closer scrutiny of their financial reports and audits. The step came through a new memorandum of understanding signed on Monday.

SFC and AFRC Sign New MoU on Crypto Oversight

The Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) said the deal now covers financial and compliance reporting by SFC-licensed virtual asset service providers. It also applies to licensed corporations, registered open-ended fund companies and authorized funds.

What the Agreement Covers

Beyond reporting, the MoU reaches related audit and assurance work. It sets up a framework for sharing information, referring cases, helping each other and running joint inspections and investigations. It replaces a 2021 agreement between the SFC and the Financial Reporting Council, a body renamed the AFRC in 2022.

Hong Kong Crypto Regulation Keeps Growing

SFC Chair Kelvin Wong said the closer cooperation would give “more comprehensive oversight” across more entities and activities in the city’s financial sector.

The move follows other steps in Hong Kong’s digital asset rulebook. In January, regulators outlined plans for new rules on crypto advisory services, and the SFC has also introduced frameworks for virtual asset margin financing and perpetual contracts.