Industry group backs global crypto tax transparency in principle but warns current proposals could expose firms and directors to excessive compliance and liability risks.
Hong Kong’s crypto industry is pressing the government to soften parts of its planned adoption of the OECD’s new global crypto tax reporting standards, arguing that the current framework could impose heavy operational and legal burdens on local firms.
The Hong Kong Securities and Futures Professionals Association said the proposed implementation of the Crypto Asset Reporting Framework and related changes to the Common Reporting Standard risk creating liability exposure for institutions and their directors, even as the city seeks to cement its role as a regulated digital asset hub.
The OECD’s CARF is designed to enable automatic cross border tax information exchange for crypto asset users, extending existing financial account reporting rules to digital assets. Hong Kong is among 76 markets that have committed to adopting the framework and one of 27 jurisdictions preparing for first data exchanges by 2028, according to the OECD.
Industry backs transparency but seeks safeguards
The association said it broadly supports the direction of the proposals, including mandatory registration of crypto service providers and expanded transaction reporting requirements.
However, it urged the government to introduce lighter obligations for firms with no reportable activity, stronger personal data protections and the ability for companies to transfer record keeping to regulated third parties when they wind down operations.
The group warned that uncapped per account penalties and personal liability for directors could raise compliance risks and deter participation, calling for clear penalty caps and protections for companies that act in good faith.
The debate comes as Hong Kong tightens its crypto licensing regime while positioning itself as a regulated digital asset centre. Centralised exchanges serving local investors must comply with Know Your Customer, custody, market abuse and Anti Money Laundering standards.
As of early 2026, 11 crypto trading platforms including HashKey Global, OSL and Bullish are authorised by the Securities and Futures Commission to operate in the city.
Globally, CARF is reshaping how tax authorities monitor crypto activity. Early moving jurisdictions have begun collecting standardised data such as tax residency, balances and transaction records from crypto exchanges.
There are 48 jurisdictions including the United Kingdom and members of the European Union that plan to start their first cross border exchanges of crypto reporting data in 2027, based on information gathered in 2026.
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