Concerns Over Operational and Liability Risks
The Hong Kong Securities & Futures Professionals Association (HKSFPA) has urged the city’s government to soften some elements of its planned implementation of the Organisation for Economic Co-operation and Development’s (OECD) crypto reporting standards. The industry body warned that the OECD’s Crypto Asset Reporting Framework (CARF) and related Common Reporting Standard (CRS) amendments could saddle local institutions with operational and liability risks.
CARF is a new standard for automatic tax information exchange for crypto asset users across borders, while CRS is the OECD’s existing automatic information exchange regime for traditional financial accounts.
Hong Kong is one of 76 markets that have committed to implementing CARF, and among the 27 jurisdictions undertaking first data exchanges by 2028, according to the OECD.
Industry Support with Caveats
The HKSFPA stated that it broadly supports the direction of the proposals, including mandatory registration of crypto service providers and expanded transactions reporting. However, the association called for lighter requirements for entities with no reporting activity, stronger personal data protections, and the ability to transfer record-keeping to regulated third parties when companies cease operations.
The group expressed concerns that uncapped per-account penalties and personal liability for directors could raise compliance risks. They urged for the introduction of clear penalty caps and safeguards for companies that act in good faith.
Hong Kong's Crypto Ambitions and Regulatory Pressures
This discussion takes place as Hong Kong actively works to position itself as a regulated crypto hub. The city's licensing regime mandates that centralized exchanges serving Hong Kong investors meet Know Your Customer (KYC), custody, market abuse, and Anti-Money Laundering (AML) standards. As of early 2026, 11 crypto trading platforms, including Hashkey Global, OSL, and Bullish, are authorized by the Securities and Futures Commission (SFC) to operate in the city.
Globally, CARF is set to reshape crypto tax reporting. Jurisdictions that are moving early have begun collecting data from crypto exchanges, including standardized tax residency, balance, and transaction information. Forty-eight jurisdictions, including the United Kingdom and members of the European Union, plan to commence their first cross-border exchanges of crypto reporting data in 2027, based on information collected in 2026.