Hong Kong SFC Tightens Custody Standards for Crypto Exchanges Under ASPIRe Roadmap

Hong Kong’s securities watchdog rolled out new custody necessities for licensed crypto exchanges, reinforcing its pledge to guard shopper property as the town advances its bid to grow to be Asia’s digital asset hub.

In a round issued Friday, the Securities and Futures Commission (SFC) set minimal requirements for licensed digital asset buying and selling platforms (VATPs) protecting senior administration accountability, chilly pockets operations, the usage of third-party pockets options and real-time risk monitoring.

The transfer comes after the regulator’s focused overview earlier this yr discovered “inadequacies” in some present exchanges’ cybersecurity and custody controls. The tips additionally type the idea of expectations for digital asset custodians extra broadly.

By coupling product enlargement with exhausting guidelines on asset safety, Hong Kong is trying to differentiate itself from regional rival Singapore, which has taken a extra restrictive stance on retail crypto companies.

The announcement ties immediately into the Infrastructure and Safeguards pillars of the SFC’s ASPIRe technique, unveiled in February at CoinDesk’s Consensus 2025 in Hong Kong, which outlines a five-pronged plan to handle liquidity fragmentation, regulatory arbitrage, and market volatility whereas increasing the vary of regulated services and products.

The custody push follows a sequence of regulatory strikes this yr geared toward widening market entry whereas tightening oversight.

In February, the regulator introduced new licensing regimes for over-the-counter buying and selling and custody companies, alongside a overview of derivatives and margin buying and selling for digital property. In April, it greenlit staking companies for licensed exchanges and funds, albeit beneath strict asset management and threat disclosure necessities.