Category Archives: Hong Kong

Track the Hong Kong Securities and Futures Commission (SFC)'s virtual asset licensing policies and compliance developments, covering the latest information on VATP, VA license applications, and anti-money laundering regulations.

The Hong Kong Securities and Futures Commission (SFC) has added a fraudulent website associated with DFX Labs to its list of suspicious virtual asset trading platforms.
The Hong Kong Securities and Futures Commission (SFC) has added a fraudulent website associated with DFX Labs to its list of suspicious virtual asset trading platforms.

On September 28, 2026, the Hong Kong Securities and Futures Commission (SFC) added four websites, including www.dfx.cn, to its list of "suspicious virtual asset trading platforms." These websites were proactively reported as fraudulent by the licensed platform, DFX Labs Company Limited. This article outlines the brand misuse patterns, key points for investor verification, and the legal basis for virtual asset regulation in Hong Kong.

29
June
Hong Kong's SFC and AFRC signed a new memorandum of understanding to extend financial reporting regulation to licensed virtual asset service providers.
Hong Kong's SFC and AFRC signed a new memorandum of understanding to extend financial reporting regulation to licensed virtual asset service providers.

On September 28, 2026, the Hong Kong Securities and Futures Commission (SFC) and the Accounting and Financial Reporting Council (AFRC) signed a new Memorandum of Understanding (MOU) to extend cooperation in financial reporting, auditing, and compliance oversight to SFC-licensed virtual asset servicers, licensed corporations, accredited funds, and registered OFCs. The new framework establishes an information-sharing and coordinated inspection mechanism, replacing the 2021 MOU and aligning with the direction of Hong Kong's expanded digital asset regulation.

28
June
What should a Hong Kong company secretary do if they discover that a client refuses to provide information on the beneficial owner or control?

When a Hong Kong company secretary discovers that a client refuses to provide information on the beneficial owner or control, they cannot continue providing services without conducting due diligence, citing "client non-cooperation." The following steps should be completed in sequence: a written request documenting the gap, deadline, and client response; escalation to the compliance officer or MLRO; assessment of whether to halt new business or terminate existing services; and determination of whether a suspicious transaction report has been triggered (while adhering to the non-tipping-off boundary).

28
June
When a Hong Kong licensed company encounters a PEP or high-risk client, to what extent should the EDD and approval processes be intensified?

When a Hong Kong licensed company encounters a PEP (Peace of the Premises) or a high-risk client, the EDD (Executive Distributor) must adjust its risk level accordingly: PEPs require approval from senior management before establishing or maintaining a business relationship, and the source of funds and wealth must be verified; high-risk clients require enhanced continuous monitoring (usually reviewed at least every 6 months), supplementing evidence of beneficial owners, source of funds, purpose of transactions, and sanctions/PEP screening. If insufficient, limits should be tightened, services suspended, or withdrawal considered.

28
June
How should the documents for directors, capital, and security deposit be scheduled before registering a Hong Kong Trust Company?

Before registering a Hong Kong Trust Company, the HK$1.5 million deposit and capital arrangement should be split into two layers: a regular TCSP license is not equivalent to Trust Company registration.

28
June
How are records and approvals documented when Hong Kong MSO processes refunds or canceled transactions?

When processing refunds or transaction cancellations, Hong Kong MSOs must maintain a complete record covering all four stages: initiation, approval, execution, and review. This record must include: who initiated the refund, the reason given, who approved it within the specified amount threshold, how the funds were returned to the original payment method, how the system recorded the transaction, and whether reconciliation and independent review were completed. A simple "refund completed" statement is insufficient; instead, a verifiable chain of evidence must be established, linking customer instructions, approval records, fund flow, reconciliation results, and any escalation of issues.

28
June
Under Hong Kong's VA Dealing system, why can't client asset delivery and transaction processing be viewed together?

Once Hong Kong VA OTC business involves quoting, matching, or processing transactions on behalf of clients, it cannot be handled simply as ordinary consultation, client referral, or MSO. It is necessary to clarify who quotes the price, who finds the counterparty, who confirms the transaction, who receives and pays fiat currency, who settles the virtual assets, and whether the transaction involves Hong Kong clients.

28
June
When Hong Kong banks process trade finance, how can they simultaneously investigate sanctions and money laundering risks for dual-purpose goods and irregular shipping red flags?

When Hong Kong banks handle trade finance, dual-use goods, unusual shipping routes, frequent vessel name changes, AIS shutdown, inconsistencies between bills of lading/invoices/insurance, transshipment locations that do not conform to business logic, and lack of transparency regarding end users may all trigger sanctions, export controls, WMD proliferation financing, and money laundering risks simultaneously.

28
June
When a Hong Kong financial institution is targeted by sanctions screening, how should the freezing, reporting, and ongoing monitoring be coordinated?

When a Hong Kong financial institution is identified during a sanctions screening, it must first confirm whether it is a genuine match and not a false alarm due to a name mismatch. Once a match is confirmed, the relevant assets should be frozen or transactions restricted immediately, and the relevant authorities should be notified (the CED should be notified when Hong Kong is involved). At the same time, the identified clients should be transferred to continuous monitoring and escalation review, and a complete record of the screening, confirmation, freezing, and reporting should be kept.

28
June
When acquiring a Hong Kong TCSP or trust-related entity, how should due diligence be conducted on historical clients and AML records?

When acquiring a Hong Kong TCSP or trust-related entity, due diligence on historical clients and AML records should cover four areas: whether client files and CDD/KYC are complete and verifiable, whether the beneficial owner and control are clear, whether historical transaction monitoring and suspicious transaction reports (STRs) are recorded, and whether legacy client risks and ongoing compliance capabilities can be taken over by the new team.

28
June
Hong Kong Virtual Asset License | CZ Hong Kong Book Club Analysis: RWA Securities On-Chain and DEX Compliance Path
Hong Kong Virtual Asset License | CZ Hong Kong Book Club Analysis: RWA Securities On-Chain and DEX Compliance Path

On August 27, 2026, Binance founder CZ stated at a book club meeting in Hong Kong that Hong Kong is a strong market for the integration of Web3 and finance, and predicted that the on-chaining of RWA securities and the deregulation of DEX would accelerate. This statement reflects personal judgment and is not related to Binance's license application. Industry practitioners should focus on the compliant implementation of Hong Kong virtual asset licenses and tokenized products.

15
June
Changpeng Zhao discusses Web3 and RWA in Hong Kong: Beyond industry perspectives, tokenized securities are still subject to SFC rules.
Changpeng Zhao discusses Web3 and RWA in Hong Kong: Beyond industry perspectives, tokenized securities are still subject to SFC rules.

Binance founder Changpeng Zhao stated at a Hong Kong event in August 2026 that Hong Kong and Web3 are a "powerful combination," and expressed optimism about the development of RWA and DEX. However, his remarks represent industry opinions, which do not equate to regulatory approval. Tokenized securities, VATP, and decentralized arrangements are still subject to the current SFC circulars and licensing rules, and actual business operations must be assessed on a case-by-case basis, considering product structure, underlying assets, and customers.

11
June
Hong Kong-based New Flame Group announced plans to launch the Alpha RWA quantitative strategy; product details are yet to be disclosed.
Hong Kong-based New Flame Group announced plans to launch the Alpha RWA quantitative strategy; product details are yet to be disclosed.

In its announcement on August 27, 2026, Xinhuo Group stated its intention to expand its RWA integrated operation business and planned to launch the Alpha RWA crypto asset quantitative strategy. The announcement disclosed the business plan but did not specify the subscription period, full product terms, or current sales status. Market participants still need to verify the official offering documents, applicable investor restrictions, and relevant regulatory registrations, and should not equate the company's plan with regulatory confirmation or product launch.

30
June
When a Hong Kong MSO changes its business location, agency, or online channels, is it necessary to notify Customs in advance?
When a Hong Kong MSO changes its business location, agency, or online channels, is it necessary to notify Customs in advance?

When a Hong Kong MSO changes its place of business, agency, or online channels, it should first determine whether it will affect license information, actual place of business, customer contact, record keeping, agency authority, and online account opening/trading process. If it affects any regulated fact, a change assessment and necessary notification or declaration should be completed before the change is implemented.

28
June
How should business be diverted between Hong Kong VA OTC, MSO, VATP, and managed services?
How should business be diverted between Hong Kong VA OTC, MSO, VATP, and managed services?

Hong Kong VA OTC and MSO are not the same thing. MSO mainly focuses on remittance, exchange, and money services; VA OTC/VA Dealing is closer to the buying, selling, quoting, execution, arranging transactions, and transaction services of virtual assets. As of June 2026

28
June
What materials and compliance systems do cross-border payment teams typically need to prepare before applying for a Hong Kong MSO?
What materials and compliance systems do cross-border payment teams typically need to prepare before applying for a Hong Kong MSO?

When dealing with Hong Kong MSO issues, one should first examine whether the business involves remittance, exchange, money change, or cross-border fiat currency receipts and payments. Then, one should verify customer due diligence, source of funds, purpose of payment, transaction monitoring, STR upgrades, and record keeping. One cannot simply look at whether there is a license name.

28
June
When a Hong Kong company secretary handles a change of registered address, how should the director's instructions, statutory documents, and filing date be verified?
When a Hong Kong company secretary handles a change of registered address, how should the director's instructions, statutory documents, and filing date be verified?

When a Hong Kong company secretary handles a change of registered address, they should first obtain clear written instructions from the authorized director, verify the company's articles of association, board resolutions, existing statutory registers, and proof of the proposed address, and then prepare and submit the address change declaration according to the applicable period. After submission, the new address must also be synchronized to the statutory register, company letterhead, bank and license files; if there are inconsistencies in the authority of the person giving instructions, proof of address, or registration information, the declaration should be suspended and a review record should be retained.

28
June
When Hong Kong TCSP provides registered address and company secretarial services to offshore groups, how can changes in beneficiary information be continuously tracked?
When Hong Kong TCSP provides registered address and company secretarial services to offshore groups, how can changes in beneficiary information be continuously tracked?

When Hong Kong TCSP provides registered address and company secretarial services to offshore groups, changes to beneficiary information should trigger a re-verification of beneficiaries, controllers, directors' authorization, service purpose, and risk rating; the original services should not be continued after only updating administrative records before the CDD/EDD review is completed.

28
June
What is the difference between VA OTC and MSO in Hong Kong?
What is the difference between VA OTC and MSO in Hong Kong?

Hong Kong VA OTC and MSO are not the same thing. MSO mainly focuses on remittance, exchange, and money services; VA OTC/VA Dealing is closer to the buying, selling, quoting, execution, arranging transactions, and transaction services of virtual assets. As of June 2026

27
June
When a Type 4 advisory team provides a model portfolio to a fund manager, how should the boundaries of the Hong Kong license be explained?
When a Type 4 advisory team provides a model portfolio to a fund manager, how should the boundaries of the Hong Kong license be explained?

When a Type 4 advisory team provides a model portfolio to a fund manager, the key is not whether the document is called "research" or "model," but whether the content constitutes investment advice for securities, whether the fund manager will make trading decisions based on it, and who is responsible for portfolio construction, suitability, conflicts of interest, and record keeping.

27
June

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