Hong Kong Professionals Association Urges Regulators To Ease Crypto Reporting Rules
A Hong Kong trade group has urged town’s regulators to ease points of the Organisation for Economic Co-operation and Development’s (OECD) crypto reporting guidelines forward of its implementation.
Association Pushes To Soften CARF Requirements
On Monday, the Hong Kong Securities & Futures Professionals Association (HKSFPA) launched a response to the implementation of the OECD’s Crypto Asset Reporting Framework (CARF) and the associated amendments made to Hong Kong’s Common Reporting Standard (CRS).
In their official response, the affiliation shared its issues about sure components of the CARF and CRS amendments, warning that they might create operational and legal responsibility dangers for market members.
Notably, the HKSFPA affirmed that it principally helps the proposals, however urged regulators to ease the record-keeping necessities for dissolved entities. “We usually agree with the six-year retention interval to align with present inland income and CRS requirements,” they defined, “however we have now issues relating to the obligations positioned on people post-dissolution.”
The trade group argued that holding administrators or principal officers personally responsible for record-keeping after dissolution poses important sensible challenges, noting that former officers of dissolved companies could lack the assets, infrastructure, and authorized standing to take care of delicate private information of former shoppers.
As a consequence, they advised the federal government “permit for the appointment of a delegated third-party custodian (resembling a liquidator or a licensed company service supplier) to satisfy this obligation, slightly than putting indefinite private legal responsibility and logistical burden on former particular person officers.”
Moreover, the affiliation additionally cautioned that the proposed uncapped per-account penalties for minor technical errors. They asserted that this might result in “disproportionately astronomical fines for systemic software program errors affecting 1000’s of accounts the place there was no intent to defraud.”
To clear up this, they proposed a “cheap cap” on complete penalties for unintentional administrative errors or first-time offenses to make sure that the per-account calculation “is reserved for instances of willful negligence or intentional evasion.”
Additionally, the group advised a “lite” registration or a simplified annual declaration course of for Reporting Crypto-Asset Service Providers (RCASPs) that anticipate submitting Nil Returns, to cut back administrative prices whereas nonetheless satisfying the Inland Revenue Department’s oversight necessities.
Hong Kong’s Crypto Hub Efforts
Notably, Hong Kong is among the many 76 markets dedicated to implementing the upcoming crypto reporting framework, which is the OECD’s new world customary for exchanging tax data on crypto belongings.
The CARF is designed to forestall tax evasion by bringing crypto customers throughout borders underneath world tax transparency guidelines, just like the OECD’s present CRS for conventional finance. Hong Kong might be among the many 27 jurisdictions that can start their first cross-border exchanges of crypto reporting information in 2028.
Over the previous few years, Hong Kong monetary authorities have been actively working to develop a complete framework that helps the enlargement of the digital belongings trade, a part of its technique to grow to be a number one crypto hub on the earth.
As reported by Bitcoinist, town is exploring guidelines to permit insurance coverage firms to spend money on cryptocurrencies and the infrastructure sector. The Hong Kong Insurance Authority not too long ago proposed a framework that would channel insurance coverage capital into cryptocurrencies and stablecoins.
Moreover, the Hong Kong Monetary Authority (HKMA) is anticipated to grant the primary batch of stablecoin issuer licenses within the first few months of the 12 months. The HKMA enacted the Stablecoins Ordinance in August, which directs any particular person or entity looking for to problem a stablecoin in Hong Kong, or any Hong Kong Dollar-pegged token, to acquire a license from the regulator.
Multiple firms have utilized for the license, with over 30 purposes filed in 2025, together with logistics expertise agency Reitar Logtech and the abroad arm of Chinese mainland monetary expertise large Ant Group.
