The Hong Kong Securities and Futures Commission (SFC) has issued new, immediate effective guidance on cryptocurrency custody standards, offering comprehensive safety requirements and a ban on smart contracts in cold wallet implementation.
In a circular Issued On Friday, the regulator outlined the prescriptive control for a licensed guardian of virtual assets. Measures require a certified hardware security module, which only allows the evacuation of white -related addresses, and maintains a 24/7 security operating center for monitoring systems, networks, wallets and infrastructure.
The environment in which private keys are used to sign the transaction should also be secured air-gapdi and physically, in which keys are produced and kept offline. The regulator recommends “strict multi-factor physical access control”.
“Moving forward, these standard virtual assets will form the main expectations for providers of conservative services, and will help promote a consistent structure for virtual asset detention in the industry,” the circular reads.
Connected: Animoka and Standard Chartered Form Stabelcoin Venture in Hong Kong
No smart contract for cold wallet
One of the most striking changes is banned on smart contracts in cold purse. The circular states that “Cold Wallet Implementation should not include smart contracts on public blockchain to reduce the possible online attack vector related to on-chain smart contracts.”
https://www.youtube.com/watch?v=tzdgwhx2Xts
Smart contracts are used widely by institutional custodians for warm and cold purse. For example, Bitgo, Use Ethereum smart contracts that are adapted to both hot and cold wallets and details its smart-contract multicing models for account-based chains.
Safe, first known as Gnosis Safe, is another smart contract-based detention solution, which has a mesari Report Stating that $ 72 billion was organized in more than 25 deployed smart accounts As the third quarter of 2024.
America-based public trading crypto exchange coinbase called In March 2024, the safe “major provider” of multisigent services, underlining the possible industry pushback for Hong Kong’s move.
Connected: New rules are effective as Hong Kong StableCoin stock slides, experts see healthy reset
Hong Kong makes a crypto hotspot
Hong Kong is emerging quickly as the crypto hotspot of Asia, moving forward on rules and market access. The regulators approved and launched the spot bitcoin and Ether ETF in April 2024, giving the institutions an obedient way to acquire exposure, and in February, Aspire Roadmap was taken to detention, products and safety measures in the market structure.
At the same time, China’s special administrative area expands its licensed exchange roster and locks in a full stabechoin rule. At the end of 2024, more virtual asset trading platform licenses were added, and Hong Kong’s Stabelcoin Act came into effect on 1 August, with the upcoming public registry of licensed issuers.
magazine: Hong Kong Stabelcoin Mania, Pokémon on Solana: Asia Express down
