A Hong Kong business group has urged the town’s regulators to ease elements of the Group 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 principally 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’ve got issues relating to the obligations positioned on people post-dissolution.”
The business group argued that holding administrators or principal officers personally chargeable for record-keeping after dissolution poses important sensible challenges, noting that former officers of dissolved firms could lack the assets, infrastructure, and authorized standing to take care of delicate private knowledge of former purchasers.
Because of this, they urged the federal government “permit for the appointment of a delegated third-party custodian (similar to a liquidator or a licensed company service supplier) to satisfy this obligation, somewhat 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 hundreds of accounts the place there was no intent to defraud.”
To resolve 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 scale 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 normal for exchanging tax info 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 current CRS for conventional finance. Hong Kong might 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 belongings business, a part of its technique to grow to be a number one crypto hub on this planet.
As reported by Bitcoinist, the town is exploring guidelines to permit insurance coverage firms to put money into cryptocurrencies and the infrastructure sector. The Hong Kong Insurance coverage Authority lately proposed a framework that would channel insurance coverage capital into cryptocurrencies and stablecoins.
Furthermore, the Hong Kong Financial Authority (HKMA) is predicted 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 searching for to difficulty 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 purposes 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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