Circular to licensed virtual asset trading platform operators on custody of virtual assets

On August 15, 2025, the Securities and Futures Commission (SFC) issued a circular outlining its expectations for licensed virtual asset trading platforms (VATPs) to enhance the custody of client virtual assets. This initiative responds to recent incidents of custody vulnerabilities and cybersecurity threats, emphasizing the need for VATPs to strengthen their practices. The SFC highlighted weaknesses in wallet infrastructures and provided guidelines on minimum standards, including senior management responsibilities and real-time threat monitoring. Dr. Eric Yip, SFC’s Executive Director of Intermediaries, stressed that protecting client assets is crucial for fostering a competitive and trustworthy digital asset ecosystem in Hong Kong, aligning with the SFC’s “ASPIRe” roadmap objectives. Resources: https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/supervision/doc?refNo=25EC44