Hong Kong Approves Law on Crypto Service Reporting

Hong Kong has approved a law on crypto service reporting, and data collection under the new rules will begin in 2027. The decision affects exchanges, custodial services, and digital asset users operating through local infrastructure.

Hong Kong’s Legislative Council supported amendments to the Inland Revenue Ordinance. They introduce the CARF standard and the updated CRS, developed by the OECD. The bill was published in the Gazette on 22 May 2026, the first reading in LegCo took place on 3 June 2026, and the law was passed on 4 November 2026.

What exactly does the new law change?

CARF gives tax authorities a clearer picture of cryptoasset flows. This is not just about accounts, but also about the data a service must collect for each reportable user.

According to IRD, reports will include name, address, tax residency, TIN, and, where required, date and place of birth. Aggregated data will also be submitted for each type of cryptoasset: gross amount received or paid, fair market value, number of units, and number of transactions.

In simple terms, there will be less anonymity in reporting. And that is not all.

Special emphasis was placed on registration. Crypto services with nexus in Hong Kong must register in the CARF Portal even if they have nothing to report yet. The deadline is strict: by 31 January of the year following the year in which the nexus arises.

Why does this matter right now?

For Hong Kong, this is not just a technical amendment. The city has long tried to maintain its status as one of Asia’s leading hubs for digital assets. That is why tax rules here are also read as a signal to business.

Secretary for Financial Services and the Treasury Christopher Hui said that implementing the standards should strengthen the confidence of crypto services, financial institutions, and digital asset users in long-term operations in Hong Kong. That is an important detail. The regulator is not only collecting data, but also trying to make the market more predictable.

There is also a practical side. For new clients, RCASP must collect self-certification during onboarding. For existing users, this must be done within 12 months after CARF goes live in the jurisdiction. In other words, there is a transition period, but it is not endless.

Another detail that often gets lost in headlines: CARF in Hong Kong covers not only fungible tokens, but also NFTs if they are used for payments or investments. Exemptions are also specified, including CBDC and certain e-money products. For the market, this means the line between a “regular token” and a reportable asset will now become much clearer.

Market reaction

For now, this is not a story about a sharp move in the price of Bitcoin or Ethereum. It is a story about compliance. But for companies operating in Hong Kong, the new rules could change the cost of accounting and customer verification.

Christopher Hui emphasized that the new standards should strengthen the confidence of crypto services, financial institutions, and digital asset users in long-term operations in Hong Kong.

The broader context is also telling. According to the SFC, as of 16 October 2026, there were 13 licensed virtual asset trading platforms in Hong Kong and another 5 applicants. In other words, the market is no longer empty, and the new rules are being applied to live infrastructure, not theory.

It is also worth mentioning Chainalysis’s estimate, which valued Hong Kong’s crypto economy for the 2025–2026 period at $192.2 billion, with nearly $24 billion in inbound B2B flows. That explains why the authorities want more transparency. When volumes are that large, the tax trail is no small matter.

• Data collection under CARF will start in 2027.

• The updated CRS will take effect in 2028.

• Automatic exchange under the new CRS is planned from 2029.

• Crypto services must register in the CARF Portal even without reportable data.

• New clients must provide self-certification during onboarding.

• For existing users, verification lasts 12 months.

What does this mean for investors?

For private investors, the main takeaway is simple: transactions through Hong Kong services will become more transparent to tax authorities. If someone is used to thinking that crypto and reporting exist separately, this period in Hong Kong changes that.

For services, the consequence is different. They will need to collect data more accurately, verify clients, and prepare for international information exchange. That is not necessarily bad for the market. But it will not be cheap.

Ukrainian traders and companies using Asian platforms should remember one more thing: jurisdictions in Asia are moving toward stricter reporting faster than many expect. So the question is not only where assets are held, but also what data the regulator can see about them.

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Frequently asked questions

When will CARF data collection start in Hong Kong?

Data collection will start in 2027. But some preparatory requirements are already in force, including registration in the CARF Portal for services with nexus in Hong Kong.

What data exactly will crypto services report?

For a reportable user, this includes name, address, tax residency, and TIN. Where required, date and place of birth are also included, as well as aggregated data for each type of cryptoasset and the number of transactions.

Does the law apply to NFTs?

Yes, if NFTs can be used for payments or investments. At the same time, CBDC and certain e-money products are not covered by these rules.

Hong Kong has taken another step toward stricter tax transparency in crypto. For the market, this means more reporting, more checks, and less room for gray schemes.

This material is not financial advice. Cryptocurrency trading involves significant risks. Part of this text was prepared with the help of artificial intelligence based on public sources and reviewed by our editorial team.