Key Takeaways
Hong Kong’s SFC has introduced new standards to enhance the custody of virtual assets for licensed trading platforms.
The guidance mandates stronger wallet infrastructure, access controls, and management oversight to address global security risks.
Hong Kong’s Securities and Futures Commission (SFC) has issued a circular to all licensed virtual asset trading platforms (VATPs) outlining minimum standards and good practices for safeguarding client digital assets.
The measures, introduced under the “Safeguard” pillar of the SFC’s ASPIRe roadmap, respond to recent findings from the regulator’s targeted review and a string of high-profile custody failures on overseas platforms. These incidents have exposed weaknesses in wallet infrastructure, transaction verification processes, and access controls.
By setting clear expectations in areas such as senior management accountability, secure cold wallet operations, third-party wallet oversight, and real-time threat monitoring, the SFC aims to raise industry-wide custody resilience and ensure Hong Kong’s virtual asset sector develops on a secure and sustainable footing.
“In order for Hong Kong to foster a competitive, sustainable and trusted digital asset ecosystem, client asset protection must always remain a top priority for all licensed VATPs, which can leverage the SFC’s practical guide to step up their custody practices especially amid heightened risks globally,” said Dr Eric Yip, the SFC’s Executive Director of Intermediaries.