Regulatory Alerts2026-05-27
Added · Updated
Updated Guidance on Expected Standards on Provision of Custodial Services for Digital Assets by Authorized Institutions
The Hong Kong Monetary Authority issues updated guidance requiring authorized institutions to implement robust governance, risk management, and segregation of client digital assets when providing custodial services. The document mandates strict safeguarding measures, including the use of cold storage, hardware security modules, and key sharding, while restricting delegation and outsourcing to specific licensed entities. Authorized institutions must also ensure comprehensive disclosure to clients, maintain rigorous record-keeping and reconciliation processes, and conduct ongoing independent audits to mitigate security and operational risks.