Hong Kong regulators extend audit handshake to crypto firms, because spreadsheets deserve oversight too 📋

Hong Kong's Securities and Futures Commission and the Accounting and Financial Reporting Council have signed a memorandum of understanding that pulls SFC-licensed virtual asset service providers into their joint supervisory framework. Announced Monday, the MoU extends cooperation on financial and compliance reporting, along with related audit and assurance work, to virtual asset service providers, licensed corporations, registered open-ended fund companies and authorized funds.

The agreement sets out how the two regulators will share information, refer cases, render mutual assistance and coordinate inspections and investigations. It replaces a 2021 MoU between the SFC and the Financial Reporting Council, which was renamed the AFRC in 2022, and broadens the range of entities and activities subject to joint oversight in Hong Kong's financial sector.

SFC Chair Kelvin Wong said the expanded cooperation would deliver "more comprehensive oversight" across a wider group of entities and activities operating within Hong Kong's markets. The AFRC, previously focused on listed company audits, will now participate in examinations of crypto-related reporting alongside the SFC's virtual asset supervision team.

The MoU arrives as Hong Kong continues to build out its digital asset rulebook. In January, regulators outlined plans for new rules covering crypto advisory services, while the SFC has also introduced frameworks for virtual asset margin financing and perpetual contracts. Separately, a former banker has been jailed in connection with $1.6 billion in false credit and cryptocurrency bribes, according to a report cited by industry outlets.