Industry Group Pushes to Cap Penalties in CARF Implementation
The Hong Kong Securities & Futures Professionals Association (HKSFPA) has formally urged the government to soften the local implementation of the Organisation for Economic Co-operation and Development’s (OECD) global Crypto Asset Reporting Framework (CARF). The industry body supports the principle of greater tax transparency but warns that the current proposals introduce significant operational and liability risks for financial institutions.
Specifically, the HKSFPA called for the introduction of clear penalty caps, arguing that uncapped, per-account penalties are excessive. The group also lobbied against rules that would impose personal liability on company directors, seeking safeguards for those who act in good faith. Further recommendations include more flexible record-keeping rules, stronger personal data protections, and lighter requirements for entities with no reportable activities.
Hong Kong Balances Crypto Hub Goals With 2028 Tax Deadline
Hong Kong's move to adopt CARF places it among 76 jurisdictions committed to the new standard for automatic, cross-border exchange of tax information on crypto assets. As one of 27 jurisdictions planning for first data exchanges by 2028, the city is an early adopter, trailing only a group of 48 nations, including the United Kingdom and EU members, who will begin exchanges in 2027.
This regulatory shift creates a critical challenge for Hong Kong's ambition to position itself as a premier, regulated crypto hub. The city's existing licensing regime already requires its 11 authorized crypto trading platforms, including Hashkey Global and OSL, to adhere to strict KYC and AML standards. The impending CARF obligations add another layer of compliance complexity, forcing a delicate balance between meeting international standards and fostering a competitive environment for its growing digital asset industry.
