Hong Kong Proposes Crypto-Tax Framework, Seeks Public Views

Hong Kong has launched a public consultation on implementing a new crypto-asset tax reporting framework. The initiative aims to establish automatic exchange of tax information on digital asset transactions with international partners starting from 2028.

The Hong Kong government has launched a public consultation on revisions to the Crypto Asset Reporting Framework (CARF) and the Common Reporting Standard (CRS). The goal is to automatically exchange tax information related to crypto asset transactions with appropriate partner tax…

— Wu Blockchain (@WuBlockchain) December 9, 2025

The government announced the consultation on December 9, targeting amendments to the Inland Revenue Ordinance. These changes will implement the Crypto-Asset Reporting Framework (CARF) developed by the Organisation for Economic Co-operation and Development (OECD).

The legislative amendments are expected to be completed within the coming year. Hong Kong plans to begin automatic exchange of crypto tax information with partner jurisdictions in 2028 and implement amended Common Reporting Standard (CRS) requirements by 2029.

Hong Kong Aligns With OECD Standards

Hong Kong has participated in automatic financial account information exchanges since 2018 under the CRS framework. This system enables tax authorities worldwide to detect and combat tax evasion through shared data.

The rapid growth of digital asset markets prompted the OECD to publish CARF in 2023. The framework specifically addresses crypto-asset transactions and introduces new requirements for digital financial products.

The updated CRS incorporates enhanced reporting and due diligence standards. Financial institutions must now account for emerging digital products in their compliance procedures.

Secretary for Financial Services and the Treasury Christopher Hui emphasized the move’s strategic importance. He stated it demonstrates Hong Kong’s commitment to international tax cooperation and combating cross-border tax evasion.

Additionally, the OECD launched its second peer review of Hong Kong’s CRS administrative framework in 2024. The review examines the effectiveness of the city’s implementation and enforcement mechanisms.

In response to OECD recommendations, Hong Kong proposes mandatory registration for financial institutions. The government also plans to raise penalty levels and strengthen enforcement to maintain favorable international ratings.

Hong Kong’s Evolving Crypto Regulatory Landscape

The tax framework proposal follows significant developments in Hong Kong’s crypto sector. HashKey Group recently cleared a critical regulatory hurdle for its Hong Kong IPO.

HashKey Holdings filed plans for a Hong Kong IPO aimed at raising HK$1.67 billion (approximately $215 million). The company plans to issue more than 240 million shares, priced between HK$5.95 and HK$6.95, valuing the firm between HK$16.4 billion ($2 billion) and HK$19 billion ($2.4 billion).

🚨 JUST IN: HONG KONG'S BIGGEST CRYPTO EXCHANGE HASHKEY TO RAISE HK$1.67B IN UPCOMING IPO. pic.twitter.com/m4Oe04EgC9

— Coinwaft (@coinwaft) December 9, 2025

According to its filing, HashKey will channel 40% of the IPO proceeds into technology upgrades and infrastructure, another 40% into market expansion and ecosystem partnerships, and the remaining 20% split evenly between operational risk management and general corporate needs.

Hong Kong introduced comprehensive cryptocurrency regulations in June 2023. These rules expanded virtual asset trading beyond professional investors to include retail participants.

The Securities and Futures Commission (SFC) began licensing cryptocurrency exchanges under the new framework. OSL and HashKey Group became the first platforms to obtain SFC licenses in the city.

Meanwhile, the SFC mandates that virtual asset funds invest exclusively through licensed platforms. This requirement stems from regulatory approaches established in 2018 limiting certain investments to professional investors.

Licensed platforms must comply with comprehensive regulatory requirements. These include safe custody protocols, Know-Your-Client processes, and anti-money laundering measures.

The government accelerated certification procedures following the JPEX incident. That case represents the largest financial fraud in Hong Kong’s history and prompted stricter compliance measures.

Hong Kong will implement automatic tax information exchange only with partners meeting strict standards. These partners must demonstrate adequate data confidentiality and security protections on a reciprocal basis.