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Hong Kong’s SFC introduced stricter asset custody standards for licensed exchanges.
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New rules focus on management oversight, cold storage, and threat monitoring.
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The move follows rising global crypto security risks.
New Standards for Licensed Platforms
The Securities and Futures Commission of Hong Kong issued updated guidance requiring licensed virtual asset trading platforms to strengthen client asset custody. This follows a series of overseas incidents where poor security led to significant losses.
Areas of Focus
The new framework addresses senior management accountability, robust cold wallet infrastructure, third-party wallet provider oversight, and real-time cyber threat monitoring. The rules take immediate effect and will also guide standards for licensed virtual asset custodians.
Industry Impact
Experts believe these standards will favor larger operators with the resources to implement advanced security measures. July alone saw $142 million in hack-related losses worldwide, according to PeckShield. While mainland China maintains its ban on crypto trading, Hong Kong is pushing to become a regulated hub for the industry.
