Hong Kong Expands Financial Reporting Oversight to Crypto Firms

Hong Kong's Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) have signed a new Memorandum of Understanding (MoU) that extends financial reporting standards to licensed virtual asset service providers (VASPs). This agreement, finalized on September 28, 2026, aligns the audit and compliance requirements for crypto firms with those of traditional financial institutions, such as stock brokers and fund managers.

The updated MoU replaces a previous agreement from February 2021, which only covered traditional financial entities. Under the new framework, licensed VASPs are now required to appoint auditors and submit financial reports in accordance with the Securities and Futures Ordinance. The AFRC will apply its expertise in audit quality to ensure that crypto firms adhere to the same professional standards as publicly listed companies.

SFC Chairman Dr. Kelvin Wong emphasized that this initiative is part of a broader strategy to enhance market confidence as Hong Kong aims to solidify its position as a leading international financial center. The agreement reflects the reality that crypto firms are now formally licensed and subject to obligations similar to those of traditional financial institutions, addressing concerns from institutional investors regarding the reliability of financial information from crypto platforms.

While the MoU is non-binding and operates within existing legal frameworks, it establishes critical arrangements for information sharing, case referrals, and coordinated enforcement between the SFC and AFRC. This means that issues identified during audits could lead to investigations by either agency, enhancing regulatory oversight in the rapidly evolving crypto sector.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News