Hong Kong Tightens Crypto Custody Rules, Banning Smart Contracts

The Hong Kong Securities and Futures Commission (SFC) has introduced new stringent crypto custody rules aimed at bolstering security for licensed exchanges. A key change is the ban on using smart contracts in cold wallets, requiring the implementation of certified hardware security modules and 24/7 security operations centers. These regulations are intended to attract institutional investors by aligning Hong Kong’s digital asset practices with global standards. The SFC emphasizes its commitment to enhancing trust and attracting capital for Hong Kong’s crypto market.