The city’s securities watchdog and its accounting council have now agreed to a memorandum of understanding that will subject crypto firms to greater oversight.
On Monday, the SFC and the AFRC jointly announced their agreement. The arrangement expands collaboration on financial reporting, audits and regulatory compliance, covering licensed virtual asset service providers alongside licensed corporations, registered open-ended fund companies and authorized funds.
What the MoU covers
The Memorandum of Understanding addresses audit and assurance activities that are connected to it. It sets up a system for exchanging information, sending cases back and forth, giving help to one another, and carrying out joint inspections and investigations.
The agreement replaces a 2021 MoU signed by the SFC and the Financial Reporting Council. That earlier deal was renamed the AFRC in 2022.
Who gets covered now
The new MoU expands oversight to a broader range of entities and activities in Hong Kong’s financial sector. Kelvin Wong, chair of the SFC, said the move provides “more comprehensive oversight.”
Why this matters
Hong Kong’s push toward greater regulation of digital assets is driving the expansion. In January, regulators detailed plans for new rules governing crypto advisory services.
The SFC has put in place frameworks covering virtual asset margin financing and perpetual contracts.
The comparison
| 2021 MoU | New MoU | |
|---|---|---|
| Signing parties | SFC and Financial Reporting Council | SFC and AFRC |
| Status | Replaced | In force |
| Coverage | SFC-licensed entities | SFC-licensed entities + crypto firms |
What happens next
The source does not specify when the MoU takes effect.
What this means for crypto firms
Both regulators will now oversee licensed virtual asset service providers together, sharing responsibility for their joint oversight. As the two bodies work more closely, the AFRC’s auditing oversight role may expand.
A routine step
The move does not mark a break from what came before. Instead, it extends an already established connection to a new group of participants.
The broader picture
Over time, Hong Kong has steadily built up its digital asset regulations. This latest MoU continues that trend, tightening oversight of a market that has expanded rapidly.
Final word
The extension makes sense rather than going too far. It fills in a missing part of supervision without altering the foundation beneath it.
Wong’s framing — “more comprehensive oversight” — captures the intent. The question is whether the two bodies can actually coordinate as well as the paperwork suggests.
Source material: “Hong Kong regulators expand financial reporting oversight to licensed crypto firms,” Cointelegraph.
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