Hong Kong crypto custody regulations

Key Points:* Hong Kong announces stricter custody guidelines for virtual asset platforms.

• The new regulations aim to enhance asset protection amidst rising crypto thefts.
• Increases in operational costs anticipated for compliance with new standards. The Hong Kong Securities and Futures Commission (SFC) has mandated stricter custody regulations for virtual asset trading platforms, influencing compliance standards and custody practices across Hong Kong’s crypto market.

This policy aims to enhance asset protection amid rising global crypto theft, potentially increasing operational costs and impacting market stability for licensed platforms handling vital cryptocurrencies.

Hong Kong SFC Advances Custody Rules Amid $3 Billion in Crypto Thefts

The Securities and Futures Commission (SFC) in Hong Kong is spearheading tighter custody rules for virtual asset trading platforms (VATPs) as part of its ASPIRe strategy. The initiative is at the consultation stage, with new standards expected to bolster investor protection through improved custody practices.

Changes will demand investments in secure wallet infrastructure and third-party audits, increasing operational costs for VATPs. Compliance with asset segregation policies will be necessary to prevent vulnerabilities. This response addresses over $3 billion in crypto thefts in H1 2025.

Official statements emphasize a commitment to asset safety and have received attention across the financial sector. According to Christopher Hui, Secretary for Financial Services and the Treasury, “Virtual asset trading custody services will be primarily regulated by the SFC, while the HKMA will act as the frontline regulator when the services involve banks.”

Market Dynamics and Hong Kong’s Role in Setting Standards

Did you know? The crackdown on crypto thefts in H1 2025, totaling over $3 billion, prompted Hong Kong to enforce stricter custody regulations, aiming to curtail these security breaches significantly.

Bitcoin’s market dynamics continue to influence the broader crypto landscape. As of August 16, 2025, Bitcoin’s price stands at $117,750.05, with a market cap of $2.34 trillion. Over 24 hours, trading volume reached $66.06 billion, marking a 32.99% decline, according to CoinMarketCap. The price saw minor shifts: -0.93% in 24 hours, 0.67% in 7 days, and 13.83% over 90 days.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 05:33 UTC on August 16, 2025. Source: CoinMarketCap Coincu research highlights the importance of comprehensive regulatory frameworks in stabilizing market operations. Hong Kong’s leadership and regulation efforts are crucial in shaping secure crypto environments, potentially setting a benchmark for other regions. Ensuring robust custody standards could fortify investor confidence, aligning with global regulatory trends.

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