Hong Kong’s securities watchdog rolled out new custody necessities for licensed crypto exchanges, reinforcing its pledge to guard consumer property as town advances its bid to turn out to be Asia’s digital asset hub.
In a round issued Friday, the Securities and Futures Fee (SFC) set minimal requirements for licensed digital asset buying and selling platforms (VATPs) masking senior administration duty, chilly pockets operations, the usage of third-party pockets options and real-time risk monitoring.
The transfer comes after the regulator’s focused assessment earlier this yr discovered “inadequacies” in some present exchanges’ cybersecurity and custody controls. The rules additionally type the idea of expectations for digital asset custodians extra broadly.
By coupling product growth with onerous guidelines on asset safety, Hong Kong is seeking to differentiate itself from regional rival Singapore, which has taken a extra restrictive stance on retail crypto companies.
The announcement ties straight into the Infrastructure and Safeguards pillars of the SFC’s ASPIRe technique, unveiled in February at CoinDesk’s Consensus 2025 in Hong Kong, which outlines a five-pronged plan to handle liquidity fragmentation, regulatory arbitrage, and market volatility whereas increasing the vary of regulated services.
The custody push follows a collection of regulatory strikes this yr aimed toward widening market entry whereas tightening oversight.
In February, the regulator introduced new licensing regimes for over-the-counter buying and selling and custody companies, alongside a assessment of derivatives and margin buying and selling for digital property. In April, it greenlit staking companies for licensed exchanges and funds, albeit underneath strict asset management and threat disclosure necessities.