This move follows the SFC’s earlier reviews this year, which revealed weak control mechanisms at some crypto platforms, and aims to raise security awareness across the industry.

Access Controls Become Mandatory

Hong Kong SFC’s new regulations require licensed crypto trading platforms to establish robust wallet infrastructure and implement strict access controls to protect user assets.

Platforms will not only be responsible for securely storing users’ funds but also for creating transparent and auditable mechanisms in their transaction processes and governance structures.

These changes provide an additional layer of security against potential cyberattacks while aiming to boost investor confidence in fund protection. Through this, the SFC seeks to strengthen operational resilience in Hong Kong’s digital asset ecosystem and promote alignment with global standards.

Response to Custody Failures

Under the “Protection” pillar of its ASPIRe roadmap, the SFC has drawn important lessons from targeted reviews conducted to identify gaps in the industry. Additionally, high-profile custody failures and wallet security issues at overseas platforms have prompted the SFC to strengthen its regulatory approach. These measures aim to ensure the secure storage and management of digital assets while minimizing risks for investors.

Real-Time Monitoring

The new standards clearly define senior executives’ responsibilities in protecting customer funds. In addition, secure cold wallet operations, third-party wallet oversight, and real-time threat monitoring systems are made mandatory for platforms.

Through these measures, the SFC aims to ensure that Hong Kong’s digital asset sector develops on a sustainable, reliable, and investor-friendly foundation. Dr. Eric Yip, Executive Director of Intermediaries at the SFC, emphasized the importance of the standard, stating: “The protection of customer assets must always remain the top priority for licensed platforms, especially given the global risks facing the industry.”

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