Hong Kong’s securities regulator has introduced new custody requirements for licensed crypto exchanges, reinforcing its dedication to client asset protection as the city advances its ambition to become Asia’s digital asset hub.
In a circular released on Friday, the Securities and Futures Commission (SFC) articulated minimum requirements for licensed virtual asset trading platforms (VATPs), which include senior management responsibilities, cold wallet operations, the utilization of third-party wallet solutions, and real-time threat monitoring.
Key Points:
- New Standards: The guidelines establish expectations for cryptocurrencies providing services and set requirements for management duties and asset protection measures.
- Regulatory Intent: This initiative comes post a regulatory review that highlighted deficiencies in some exchanges’ cybersecurity and custody controls.
- Market Positioning: The newly introduced standards serve to distinguish Hong Kong from Singapore’s more restrictive approach to retail crypto services.
The SFC’s announcement connects to the Infrastructure and Safeguards aspects of its ASPIRe strategy, which was unveiled earlier in February at CoinDesk’s Consensus 2025 in Hong Kong. This strategy is designed to address liquidity issues, regulatory arbitrage, and market fluctuations while expanding the assortment of regulated products and services.
A pattern of heightened regulatory actions throughout the year mirrors a landscape where access to the market is broadened, yet oversight is concurrently intensified.
