Hong Kong Regulators Extend Audit and Reporting Cooperation to Licensed Crypto Firms

SFC and AFRC sign expanded cooperation deal covering 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 their cooperation on financial reporting and audits to licensed crypto firms.

Announced on Monday, the agreement covers financial and compliance reporting by SFC-licensed virtual asset service providers — companies allowed to offer crypto services — along with licensed corporations, registered open-ended fund companies and authorized funds.

Key points

• The MoU covers related audit and assurance work.
• It sets up a framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations.
• It replaces a 2021 MoU signed by the SFC and the Financial Reporting Council, which was renamed the AFRC in 2022.

What the regulators said

SFC Chair Kelvin Wong said the expanded cooperation would provide "more comprehensive oversight" across a broader range of entities and activities in Hong Kong's financial sector, according to the SFC announcement.

Part of Hong Kong's wider crypto rulebook

The agreement comes as Hong Kong continues to build out its digital asset regulatory framework. In January, regulators outlined plans for new rules covering crypto advisory services. The SFC has also introduced frameworks for virtual asset margin financing and perpetual contracts, a type of crypto derivative.

Why this matters for crypto firms in Hong Kong

The MoU means licensed crypto firms now fall under closer joint scrutiny of their financial reporting and audits. It gives the two regulators formal channels to share information and run coordinated checks on firms operating in the city.

Sources

• Cointelegraph