Hong Kong’s Securities and Futures Commission (SFC) and Accounting and Financial Reporting Council (AFRC) signed an agreement on September 28 to bring crypto firms under the traditional financial reporting framework. SFC-licensed virtual asset service providers (VASPs) will now be required to submit audited balance sheets, proof-of-reserves, and internal compliance reports, subject to regulatory inspections and investigations. SFC CEO Julia Leung stated that the agreement allows supervision to evolve with market dynamics and strengthens global investor confidence. Hong Kong has emerged as a global pioneer in tokenized bonds, having issued nearly $4 billion in public sector and tokenized digital bonds since 2023. Authorities argue that stricter rules help curb anti-money laundering and tax evasion, though privacy concerns have been raised among crypto users.
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