Hong Kong regulators expand financial reporting oversight to crypto firms

Hong Kong just put its crypto industry on notice: the same financial reporting standards that apply to traditional securities firms now extend to licensed virtual asset service providers. The city’s Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a new Memorandum of Understanding on September 28 that formalizes audit, compliance, and financial reporting cooperation for the crypto sector. The agreement replaces a previous MoU from February 2021, which covered only traditional financial entities. By folding licensed VASPs into the framework, Hong Kong’s regulators are signaling that crypto firms operating under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) will face the same level of scrutiny that stock brokers and fund managers have dealt with for years. What the new agreement actually covers The updated MoU establishes formal arrangements across three critical regulatory functions: information sharing between the SFC and AFRC, case referrals when one body identifies issues that fall under the other’s jurisdiction, and coordinated enforcement activities when investigations span both agencies’ terri...