A Hong Kong industry group has called on the city’s regulators to relax certain aspects of the Organisation for Economic Co-operation and Development’s (OECD) crypto reporting rules as the implementation date approaches.
On Monday, the Hong Kong Securities & Futures Professionals Association (HKSFPA) issued a statement regarding the OECD’s Crypto Asset Reporting Framework (CARF) alongside amendments to Hong Kong’s Common Reporting Standard (CRS). The association expressed apprehensions about specific elements of the CARF and CRS modifications, warning that they may introduce operational and liability risks for market participants.
Importantly, while the HKSFPA expressed broad support for the proposals, it urged regulators to mitigate record-keeping requirements concerning dissolved entities. The association stated, “We generally agree with the six-year retention period to align with existing inland revenue and CRS standards, but we have concerns regarding the obligations placed on individuals post-dissolution.”
The group highlighted the difficulties of holding directors or principal officers personally liable for record-keeping following a company’s dissolution. They noted that former officers may not have the resources, infrastructure, or legal standing to manage sensitive data of former clients.
In light of these challenges, they recommended that the government permit the appointment of a designated third-party custodian, such as a liquidator or licensed corporate service provider, to assume this responsibility rather than placing indefinite personal liability on former individual officers.
Furthermore, the association raised concerns regarding the proposed uncapped per-account penalties for minor technical errors, warning that such measures could lead to excessively high fines for systemic software errors affecting numerous accounts without any intention to defraud.
To address this, they advocated for a reasonable cap on total penalties for unintentional administrative errors or first-time offenses, ensuring that severe per-account penalties are reserved for cases involving willful negligence or intentional evasion.
Additionally, the HKSFPA proposed a streamlined registration process or simplified annual declaration for Reporting Crypto-Asset Service Providers (RCASPs) that expect to file Nil Returns, thereby reducing administrative costs while complying with the Inland Revenue Department’s oversight requirements.
Hong Kong stands as one of the 76 markets committed to implementing the forthcoming crypto reporting framework, which aims to foster global tax transparency regarding crypto assets, similar to the OECD’s existing CRS for traditional financial assets. By 2028, Hong Kong will be among the 27 jurisdictions initiating cross-border exchanges of crypto reporting data.
In recent years, Hong Kong financial authorities have made significant strides in creating a comprehensive framework to promote the growth of the digital assets industry, aiming to establish the city as a preeminent global crypto hub.
Reportedly, the city is exploring regulations that would allow insurance companies to invest in cryptocurrencies and infrastructure. The Hong Kong Insurance Authority has suggested a framework that could potentially channel insurance capital into cryptocurrencies and stablecoins.
Additionally, the Hong Kong Monetary Authority (HKMA) anticipates issuing the first licenses for stablecoin issuers in the early months of the year. The recently enacted Stablecoins Ordinance mandates that any individual or entity looking to issue a stablecoin in Hong Kong must obtain a license from the regulator.
As of now, multiple companies have applied for these licenses, with over 30 applications submitted in 2025, including firms like Reitar Logtech and Ant Group’s overseas arm.
