A Hong Kong business group has urged the town’s regulators to ease elements of the Organisation for Financial Co-operation and Improvement’s (OECD) crypto reporting guidelines forward of its implementation.
Affiliation Pushes To Soften CARF Necessities
On Monday, the Hong Kong Securities & Futures Professionals Affiliation (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 Widespread Reporting Customary (CRS).
Of their official response, the affiliation shared its issues about sure components of the CARF and CRS amendments, warning that they may create operational and legal responsibility dangers for market individuals.
Notably, the HKSFPA affirmed that it largely helps the proposals, however urged regulators to ease the record-keeping necessities for dissolved entities. “We typically agree with the six-year retention interval to align with current inland income and CRS requirements,” they defined, “however we now have issues concerning the obligations positioned on people post-dissolution.”
The business group argued that holding administrators or principal officers personally responsible for record-keeping after dissolution poses vital sensible challenges, noting that former officers of dissolved firms might lack the sources, infrastructure, and authorized standing to keep up delicate private knowledge of former shoppers.
Because of this, they urged the federal government “enable for the appointment of a chosen third-party custodian (reminiscent of a liquidator or a licensed company service supplier) to satisfy this obligation, quite than inserting indefinite private legal responsibility and logistical burden on former particular person officers.”
Furthermore, 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 unravel this, they proposed a “affordable 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.”
Moreover, the group urged a “lite” registration or a simplified annual declaration course of for Reporting Crypto-Asset Service Suppliers (RCASPs) that anticipate submitting Nil Returns, to cut back administrative prices whereas nonetheless satisfying the Inland Income Division’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 commonplace for exchanging tax info on crypto property.
The CARF is designed to stop tax evasion by bringing crypto customers throughout borders underneath world tax transparency guidelines, much like the OECD’s current CRS for conventional finance. Hong Kong will probably be among the many 27 jurisdictions that can start their first cross-border exchanges of crypto reporting knowledge in 2028.
Over the previous few years, Hong Kong monetary authorities have been actively working to develop a complete framework that helps the growth of the digital property business, a part of its technique to turn into a number one crypto hub on the planet.
As reported by Bitcoinist, the town is exploring guidelines to permit insurance coverage firms to spend money on cryptocurrencies and the infrastructure sector. The Hong Kong Insurance coverage Authority just lately proposed a framework that might channel insurance coverage capital into cryptocurrencies and stablecoins.
Furthermore, the Hong Kong Financial Authority (HKMA) is anticipated to grant the primary batch of stablecoin issuer licenses within the first few months of the yr. The HKMA enacted the Stablecoins Ordinance in August, which directs any particular person or entity looking for to subject a stablecoin in Hong Kong, or any Hong Kong Greenback-pegged token, to acquire a license from the regulator.
A number of firms have utilized for the license, with over 30 functions filed in 2025, together with logistics expertise agency Reitar Logtech and the abroad arm of Chinese language mainland monetary expertise large Ant Group.
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