SFC Faces Calls to Ease Crypto Regulations

Hong Kong's financial industry is calling for a more business-friendly regulatory framework for cryptocurrencies. Industry representatives have urged the Securities and Futures Commission (SFC) to simplify existing rules, reduce compliance costs, and establish clearer guidelines for companies operating in the digital asset sector.

The proposals were presented during a meeting with regulators attended by Deputy Secretary for Financial Services and the Treasury Chan Ho-lim. According to officials, some of the requested changes are already set to be implemented.

The SFC announced plans to revise the Virtual Asset Platform Practitioner Examination (CVAP). The exam will be separated from the mandatory training courses, candidates will receive official study materials, and examination fees will be reduced. Regulators are also considering allowing applicants to take the exam without completing the training course beforehand.

Despite these planned improvements, industry participants argue that the current regulatory framework remains overly complex and costly. Businesses are seeking simpler licensing procedures, clearer operational requirements, and more practical technical standards for the custody of digital assets.

The industry has also called for a clearer distinction between technology providers and regulated financial service firms. According to market representatives, companies that only develop or supply technology solutions should not automatically be required to obtain financial services licenses.

Another key request is the faster approval of cryptocurrency derivatives trading. At present, retail investors in Hong Kong can trade only five cryptocurrencies—Bitcoin, Ethereum, Avalanche, Chainlink, and Solana—and are limited to long positions only.

The discussions also covered cryptocurrency payments, custody rules for private equity funds, and future regulatory challenges related to artificial intelligence, quantum computing, and the digital yuan. Industry representatives confirmed that further talks with regulators will continue as both sides work toward additional reforms.