Hong Kong’s SFC Cracks Down: Crypto Firms Face Hard Deadline Under New STREAM 2 Surveillance System
Hong Kong's financial watchdog just drew a line in the sand. The Securities and Futures Commission (SFC) is rolling out STREAM 2, a next-gen monitoring framework that puts crypto firms on the clock. The message is clear: report suspicious activity, or face the consequences.
The Compliance Countdown Begins
Forget vague guidelines. The SFC is instituting a strict, non-negotiable deadline for filing reports under its new system. This isn't a suggestion—it's a mandate with teeth, designed to close loopholes and force transparency in a sector often criticized for operating in the shadows. The era of voluntary compliance is over.
Building a Fortress, Not a Fence
STREAM 2 represents a significant upgrade from previous oversight attempts. It demands real-time vigilance and establishes a formalized pipeline for flagging transactions that smell even faintly of market manipulation, money laundering, or fraud. The goal is to build a regulatory fortress, transforming Hong Kong from a crypto wild west into a legitimized global hub—or at least, that's the official pitch.
A Necessary Evil or Innovation Killer?
Proponents hail the move as essential for protecting investors and integrating digital assets into the mainstream financial system. They argue clear rules attract serious capital. Critics, however, see it as another layer of bureaucratic friction, a system that could stifle the very innovation that makes crypto compelling. It’s the classic finance sector dilemma: regulate to build trust, but risk regulating the life out of the market. After all, what's a major financial announcement without a new compliance headache to fund?
One thing's certain: the clock is ticking. Hong Kong's crypto players must now invest not just in blockchain, but in bulletproof surveillance ops. The SFC is watching.
Hong Kong’s SFC sets deadline
The Hong Kong Securities and Futures Commission (SFC) has officially set the timeline for financial institutions like licensed corporations, virtual asset service providers (VASPs), and associated entities to transition to the “Second Generation Suspicious Transaction Report and Management System,” also known as STREAMS 2.
This new platform replaces the original STREAMS system and is designed to help the Joint Financial Intelligence Unit (JFIU) process data faster. The SFC says the new system uses better automation and analysis to track suspicious money activities.
According to the SFC circular, the JFIU will shut down the existing STREAMS platform at midnight on January 28, 2026. This will create a “blackout period” during which the JFIU cannot receive reports through any online portal. The blackout will last until the morning of February 2.
A firm in urgent need to file a Suspicious Transaction Report (STR) during these five days, must use traditional communication methods like email, phone and fax.
Once launched, STREAMS 2, will be the only legal channel for submitting STR reports. Any report sent through other channels after this time will not be accepted and will need to be resubmitted.
All previous reports filed through the old system will be moved to STREAMS 2 where firms can log in to view their past records and check the status of their previous filings.
New users must download the “STREAMS 2 User Registration Form” from the official JFIU website and email it to the unit afterwards in order to comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) laws.
Regulatory changes planned for 2026
Hong Kong’s Financial Secretary Paul Chan recently spoke at the World Economic Forum in Davos and confirmed that the country is ready to issue its first stablecoin licenses during the first quarter of 2026.
Under these rules, any company that wants to offer or market stablecoins to the public in Hong Kong must get approval from the HKMA. They are required to have a minimum paid-up capital of HK$25 million and keep high-quality assets in reserve.
They also must guarantee that users can redeem their stablecoins at par value. As of late 2025, 36 companies had already applied for these licenses. This includes major groups like a joint venture between Standard Chartered and Animoca Brands.
In early 2026, a new bill is expected to reach the Legislative Council to amend the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). This bill will create a license for those who provide advice on either buying or selling virtual assets. These managers will need to maintain at least HK$5 million in share capital.
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