
Professional bodies urge refinement of tax reporting requirements as the city advances comprehensive crypto licensing plans
Hong Kong’s leading crypto and financial professionals have called for modifications to proposed digital-asset reporting rules that would accompany a broader new licensing framework for cryptocurrency dealers, custodians and related service providers.
The push from industry groups comes as the city accelerates plans to implement mandatory licences for virtual asset dealers and custodians in 2026, part of a larger strategy to strengthen oversight while positioning Hong Kong as a global digital asset hub.
Experts and trade associations have expressed concern that certain reporting obligations under the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework could impose heavy administrative burdens on firms, potentially stifling innovation and competitiveness in the local market.
They argue that lighter reporting procedures, especially for smaller entities or those with minimal cross-border activity, could strike a better balance between regulatory compliance and business viability.
The debate over reporting rules is unfolding against the backdrop of the city’s rapid expansion of digital asset regulation.
Hong Kong authorities have finalised consultations on licensing regimes for virtual-asset dealing and custody services, and are now seeking feedback on proposals to regulate advisory and management services involving digital assets, alongside existing frameworks for stablecoin issuers and licensed exchanges.
These moves are aimed at bringing the full spectrum of crypto-related activities under a coherent regulatory regime and enhancing investor protection while preserving market dynamism.
Critics of strict reporting requirements have welcomed elements such as mandatory registration and penalties for non-compliance but advocate for safeguards including clear privacy protections and caps on liabilities for unintentional errors.
They also propose simplified processes for firms with limited reporting obligations to reduce operational complexity and cost.
Government officials have emphasised Hong Kong’s commitment to international tax transparency and the necessity of aligning with global standards such as the Crypto-Asset Reporting Framework and Common Reporting Standard.
A public consultation on the implementation of these frameworks was launched in December, with the aim of commencing automatic exchange of crypto tax information with partner jurisdictions by 2028. While industry participants broadly support enhanced compliance and regulatory clarity, they continue to advocate adjustments to ensure that reporting obligations remain proportionate and do not undermine the city’s attractiveness as a digital asset centre.
The push from industry groups comes as the city accelerates plans to implement mandatory licences for virtual asset dealers and custodians in 2026, part of a larger strategy to strengthen oversight while positioning Hong Kong as a global digital asset hub.
Experts and trade associations have expressed concern that certain reporting obligations under the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework could impose heavy administrative burdens on firms, potentially stifling innovation and competitiveness in the local market.
They argue that lighter reporting procedures, especially for smaller entities or those with minimal cross-border activity, could strike a better balance between regulatory compliance and business viability.
The debate over reporting rules is unfolding against the backdrop of the city’s rapid expansion of digital asset regulation.
Hong Kong authorities have finalised consultations on licensing regimes for virtual-asset dealing and custody services, and are now seeking feedback on proposals to regulate advisory and management services involving digital assets, alongside existing frameworks for stablecoin issuers and licensed exchanges.
These moves are aimed at bringing the full spectrum of crypto-related activities under a coherent regulatory regime and enhancing investor protection while preserving market dynamism.
Critics of strict reporting requirements have welcomed elements such as mandatory registration and penalties for non-compliance but advocate for safeguards including clear privacy protections and caps on liabilities for unintentional errors.
They also propose simplified processes for firms with limited reporting obligations to reduce operational complexity and cost.
Government officials have emphasised Hong Kong’s commitment to international tax transparency and the necessity of aligning with global standards such as the Crypto-Asset Reporting Framework and Common Reporting Standard.
A public consultation on the implementation of these frameworks was launched in December, with the aim of commencing automatic exchange of crypto tax information with partner jurisdictions by 2028. While industry participants broadly support enhanced compliance and regulatory clarity, they continue to advocate adjustments to ensure that reporting obligations remain proportionate and do not undermine the city’s attractiveness as a digital asset centre.














































