19-8-2025 – The Hong Kong Securities and Futures Commission (SFC) has released a document imposing immediate mandatory custody requirements for licensed virtual asset trading platforms (VATPs), as first reported by local regulatory sources. The guidelines cover management oversight, cold wallet operations, third-party vetting, 24/7 threat monitoring, and staff training, serving as the foundation for annual external audits.
Key measures include appointing a qualified executive to oversee client assets, generating private keys in isolated environments, and banning smart contracts for cold storage. Platforms must implement multi-level verification, use separate devices for transactions, and restrict withdrawals to pre-approved addresses. The SFC also mandates rigorous vetting of external providers, limited admin privileges, and real-time reconciliation of blockchain balances to enhance security amid rising global risks.
This move follows last month’s guidelines on stablecoin issuer licensing, reflecting Hong Kong’s push to strengthen its crypto regulatory framework. The new standards aim to protect client assets and boost industry credibility as the city positions itself as a global crypto hub, attracting international platforms and institutional investors. Non-compliance could lead to operational challenges for VATPs.
