Hong Kong Finance Association Advocates for Flexible Crypto Reporting Rules

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A leading financial industry body in Hong Kong has urged the government to adopt a more flexible approach as it prepares to implement new global tax reporting standards for cryptocurrency assets.

The Hong Kong Securities & Futures Professionals Association (HKSFPA), while supporting the overall goal, has raised concerns that the proposed adoption of the OECD’s Crypto Asset Reporting Framework (CARF) could create disproportionate burdens. The group warns that local institutions face significant operational challenges and liability exposure under the current draft rules.

CARF is designed to enable the automatic international exchange of tax information for cryptocurrency transactions, complementing the OECD’s existing Common Reporting Standard (CRS) for traditional finance. Hong Kong is committed to launching the framework by 2028.

In its recommendations, the HKSFPA advocates for several key adjustments:

• Streamlined obligations for firms with no reporting activity
• Stronger personal data privacy safeguards
• Mechanisms to legally transfer client records to third parties if a company shuts down
• The introduction of reasonable penalty caps and protections for directors of firms acting in good faith

The association argues these changes are necessary to ensure the rules are effective without stifling the responsible growth of Hong Kong’s digital asset sector.