Hong Kong SFC, AFRC Extend Audit Oversight to Licensed Crypto Companies

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 brings licensed crypto firms under expanded financial reporting and audit supervision. The agreement, announced Monday, extends regulatory cooperation to cover financial and compliance reporting by SFC-licensed virtual asset service providers, licensed corporations, registered open-ended fund companies, and authorized funds.

The MoU also covers related audit and assurance work, establishing a formal framework for information sharing, case referrals, mutual assistance, and coordinated inspections and investigations between the two bodies. It replaces a 2021 agreement signed with the Financial Reporting Council, which was renamed the AFRC in 2022.

SFC Chair Kelvin Wong said the expanded cooperation would deliver "more comprehensive oversight" across a broader range of entities and activities in Hong Kong's financial sector. The move aligns with Hong Kong's broader push to formalize its digital asset regulatory framework. In January, regulators outlined plans for new rules covering crypto advisory services, while the SFC has also introduced frameworks for virtual asset margin financing and perpetual contracts.

The development follows other enforcement actions in the region, including the recent jailing of a former banker tied to a $1.6 billion false credit scheme involving cryptocurrency bribes. Together, these steps signal Hong Kong's intent to tighten oversight across both centralized financial reporting and emerging digital asset markets.