Hong Kong Tightens Crypto Custody Rules: Banning Smart Contracts in Cold Wallets

The Hong Kong Securities and Futures Commission (SFC) has unveiled strict new guidelines for cryptocurrency custody, focusing on enhanced security measures. The circular outlines mandatory requirements for licensed custodians of virtual assets, including the use of certified hardware security modules and restricted access to wallets. Notably, a ban on smart contracts in cold wallet implementations is implemented to mitigate potential online risks.