Crypto: Breaking Hong Kong Industry Group Pushes To Soften Carf Rules

The Hong Kong Securities & Futures Professionals Association is backing the OECD’s CARF and tougher tax transparency, but wants lighter treatment and more flexible recordkeeping.

The Hong Kong Securities & Futures Professionals Association (HKSFPA) has urged the city’s government to soften some elements of its planned implementation of the Organisation for Economic Co-operation and Development’s (OECD) crypto reporting standards.

The industry body warned that the OECD’s Crypto Asset Reporting Framework (CARF) and related Common Reporting Standard (CRS) amendments could saddle local institutions with operational and liability risks.

CARF is a new standard for automatic tax information exchange for crypto asset users across borders, while CRS is the OECD’s existing automatic information exchange regime for traditional financial accounts.

Hong Kong is one of 76 markets that have committed to implementing CARF, and among the 27 jurisdictions undertaking first data exchanges by 2028, according to the OECD.

The HKSFPA said it broadly supports the direction of the proposals, including mandatory registration of crypto service providers and expanded transactions reporting.

However, it called for lighter requirement for those with no reporting activity, stronger personal data protections and the ability to transfer record-keeping to regulated third parties when companies cease operations.

The group warned that uncapped per-account penalties and personal liability for directors could raise compliance risks, and urged for the introduction of clear penalty caps and safeguards for companies that act in good faith.

Related: Colombia advances crypto tax rules as global reporting standards take shape

​Locally, the debate falls against the backdrop of Hong Kong’s push to position itself as a regulated crypto hub.

Source: CoinTelegraph