Hong Kong Regulators Broaden Audit and Reporting Cooperation for Crypto Licensees
Hong Kong’s Securities and Futures Commission and the Accounting and Financial Reporting Council broadened their cooperation agreement to include financial and compliance reporting, audits and information sharing. The updated memorandum covers SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies and authorized funds, replacing a 2021 pact. The change arrives as Hong Kong continues building out its digital-asset rulebook, including frameworks for crypto advisory services, margin financing and perpetual contracts.
The revised agreement updates a 2021 memorandum that had been signed with the body now known as the AFRC, following its 2022 renaming. It now explicitly covers reporting on finances and compliance, audit-related matters, and exchanges of information for SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies and authorized funds.
The framework allows the two regulators to refer matters, assist each other, and conduct coordinated inspections and investigations. SFC chair Kelvin Wong said the broader cooperation offers more comprehensive oversight. The move follows Hong Kong’s work on rules for crypto advisory services, virtual asset margin financing and perpetual contracts.
The tighter coordination could affect crypto firms, auditors, fund managers and investors in Hong Kong by making reporting and compliance expectations clearer and potentially more consistent. It may also raise operational and assurance costs for licensed virtual asset businesses, while giving regulators faster ways to spot and address possible breaches. For the wider public, stronger audit and information-sharing arrangements might support confidence in licensed crypto products, though outcomes will depend on how the framework is applied in practice.