After the implementation of the licensing system, Hong Kong shifted its focus from "who can enter the market" to "how well the books are kept." On September 28, the Hong Kong Securities and Futures Commission and the Accounting and Financial Reporting Council, responsible for financial reporting and related audit quality supervision, signed a new Memorandum of Understanding. The trigger for this seems to be just an internal division of labor update between the two agencies, but in essence, it pushes the virtual asset industry into another regulatory checkpoint. According to the public content, the new memorandum expands the scope of collaboration from past monitoring centered mainly on the financial reporting and related audit work of listed entities to four categories: licensed corporations, virtual asset service providers licensed by the SFC, SFC-recognized funds, and registered open-ended fund companies. It covers the financial and compliance reporting of these institutions, as well as the relevant audit and attestation work carried out by their auditors. For the first time, virtual asset service providers have been included in the financial and audit regulatory collaboration framework between the SFC and the FinTech Bureau, which means that they are no longer just receiving a license and subject to behavioral regulation, but are included in a continuous supervision network revolving around financial information quality and audit quality. As for when the new memorandum will take effect and how it will be implemented, public information has not provided a timeline or details, but the direction is already clear: the license is just the starting point; the real test for Hong Kong's virtual asset licensing system is whether they can operate long-term under transparent, verifiable financial constraints.

From Listed Companies to Licensed Institutions: The Regulatory Front Has Been Significantly Extended

Before September 28, there was already a Memorandum of Understanding between the SFC and the Accounting and Financial Reporting Council, but the collaboration line was basically drawn at the level of companies listed on the exchange—both departments mainly exchanged information and collaborated around "the financial reporting and related audit work of listed entities," ensuring that the numbers in annual reports and audit opinions, which are the facade of the capital market, would not be distorted. In other words, as long as a business did not enter the listing list, the true profit structure and risk exposure of many financial operations were effectively "invisible" under this collaboration framework.

The new memorandum pushes this regulatory front directly from the listed companies' foreground to the entire licensed ecosystem's backend. The cooperation objects have been clearly expanded to four categories: licensed corporations, virtual asset service providers licensed by the SFC, SFC-recognized funds, and registered open-ended fund companies. The focus is no longer merely on the final financial statements, but also includes the financial and compliance reporting of these entities, as well as the related audit and attestation work carried out by their auditors. The Accounting and Financial Reporting Council is responsible for financial reporting and audit quality, while the SFC oversees the securities and futures market, licensed corporations, and related products. This time, the two originally separate regulatory lines have intersected on the "financial accounts" of licensed institutions: regardless of whether they are listed, as long as they have a license and manage products, they will also face long-term scrutiny from both behavioral regulation and financial auditing collaboration perspectives. The real variable lies in how deeply this extended front can penetrate into the books of each licensed institution.

A License Is No Longer Enough: Virtual Asset Enterprises Face Continuous Checkups

For virtual asset service providers, obtaining a license from the SFC once felt like a "finish line"; meeting licensing requirements and adhering to a set of behavioral and compliance standards was enough to establish a foothold. The new Memorandum of Understanding on September 28 pushes this line further back—research briefs clearly indicate that virtual asset service providers have been included for the first time in the regulatory collaboration targets between the SFC and the FinTech Bureau, with collaborative content aimed directly at their financial and compliance reporting, as well as the related audit and attestation work of their auditors. The past focus on "whether to issue a license, whether daily operations are compliant" now adds another layer: whether the numbers reported by these platforms can withstand the combined efforts of professional audits, with the quality of financial information and audit quality now also under regulatory scrutiny.

Being included in this financial and audit collaboration chain means that virtual asset platforms need to prepare not just compliance reports submitted to the SFC, but also more frequent and systematic financial disclosures and audit cooperation expectations: the FinTech Bureau will assess audit quality, while the SFC will focus on business and products. These two lines of examination will repeatedly intersect in the accounts. The concerns emerging within the industry are understandable—compliance costs will rise, auditors' work scope and frequency may increase, and the requirements for financial transparency will heighten, as past "as long as there is no violation, they can stay hidden in a drawer" historical accounts may also be re-examined under the collaborative framework. For many institutions that have already obtained licenses, the real test is not at the moment of licensing but in whether they can endure a continuous check-up without a clear endpoint.

SFC and FinTech Bureau Collaborate: Financial Reports and Audit Information Begin to Connect

In Hong Kong's regulatory landscape, the SFC focuses on "licensing and behavior"—the securities and futures market, licensed corporations, recognized funds, and related products; the Accounting and Financial Reporting Bureau is concerned with "numbers and groundwork"—the financial reporting of local entities and the audit quality of the auditors behind them. In the past, the two mainly collaborated at the level of listed companies through the old version of the Memorandum of Understanding. Now, the new memorandum extends the scope of cooperation directly to licensed corporations, SFC licensed virtual asset service providers, SFC-recognized funds, and registered open-ended fund companies, incorporating their financial and compliance reporting, as well as audit and attestation work by their auditors.

From a principled perspective, this means that the flow of information will no longer remain within their respective systems: if the FinTech Bureau finds anomalies while reviewing a certain institution's financial report or audit work, it may refer them to the SFC under the established framework, which will then follow up from the perspectives of licensing compliance and market behavior; conversely, the SFC may also refer issues related to audit quality to the FinTech Bureau when encountering licensed entities with "unclear accounts." The research brief did not disclose specific information-sharing mechanisms, effective dates, or operational details, but the commonly stated purpose of expanding the regulatory collaboration framework is already clear: to improve the quality of financial statements, strengthen oversight of auditing work, and facilitate information exchange between regulatory agencies. For the virtual asset service providers included in this collaboration list for the first time, this is not just a line of text added to the regulatory scope, but rather their auditors, audit, and attestation work will now fall within the common view of two regulatory bodies, raising the threshold for audit quality, whereby continuous check-ups naturally extend from "Is there a license?" to "Can the accounts withstand the scrutiny of two regulatory checkpoints?"

Thicker Compliance Bills: The Gains and Losses of Hong Kong's Virtual Asset Licensing

For a virtual asset platform that has already obtained a license, the most direct change brought by the new Memorandum of Understanding is an increase in backend costs rather than front-end traffic. Virtual asset service providers being included in the financial and audit regulatory collaboration scope of the SFC and the FinTech Bureau means that financial statements and audit results will now be exposed to the scrutiny of two regulatory perspectives, making past accounting policies, accounting standards, and disclosure standards that just barely passed easier to amplify and scrutinize. Correspondingly, this brings an upgrade in the understanding of accounting standards, a higher level of cooperation regarding auditing work, and greater human resource and external consulting expenditures at the enterprise level. Public materials have not disclosed any specific penalties, audit details, or quantified costs, but the management can already foresee that the finance team needs to shift from “reporting” to "producing accounts that can withstand repeated inquiries from regulatory departments," and the weight of compliance budgeting within the entire business structure will only increase.

From the perspective of the market positioning of Hong Kong itself, this may not necessarily result in bad debts. Experiences from traditional capital markets have long proven that international financial centers often enhance information disclosure and audit quality to obtain trust premiums from institutional investors; Hong Kong's move to include virtual asset service providers in the financial and audit collaborative framework is also following this old path, merely expanding the target from listed companies to a new asset category. In the short term, stricter financial and audit regulations raise the entry barriers, and some small and medium platforms may be pushed out of the race due to compliance costs and talent requirements, accelerating the closure of what is referred to as the “having a license means having a story” era; in the medium to long term, the remaining platforms will gain stronger regulatory backing and valuation premiums in a high-standard environment, with licenses no longer merely serving as entry tickets but more like long-term options backed by judicial jurisdiction credibility.

After a Memorandum: Initial Appearance of a Closed Loop in Hong Kong's Virtual Asset Regulation

The new Memorandum of Understanding signed on September 28 officially includes virtual asset service providers under the SFC's licensing into the financial and audit collaboration list of the FinTech Bureau, expanding the previously limited old framework, which only covered listed companies, to licensed corporations, recognized funds, registered open-ended fund companies, and their auditors. For the first time, the licensing system is rigidly tied to "account quality" at a systemic level. For the industry, the significance of this step is not in immediately causing price fluctuations but in what supporting guidelines, audit, and enforcement cases may appear afterwards, and how the local audit market will reevaluate the risks and pricing of virtual asset businesses, which will truly determine the power of this collaborative mechanism. Looking back on the timeline, the main issue of Hong Kong's virtual asset regulation has shifted from “Can a license be issued, who can get a license?” to “After obtaining a license, can this account withstand professional audits and cross-institutional inspections?” The new memorandum marks a pivotal turning point: the issuance of a license is just the starting point, while continuous and verifiable financial and audit constraints represent the new boundaries of the race.

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