Hong Kong’s Crypto Crackdown: Tax Evasion in the Crosshairs with 2028 Data-Sharing Plan
Hong Kong is sharpening its regulatory knives. The financial hub is plotting a direct assault on cryptocurrency tax evasion, with a new data-sharing framework set to go live by 2028.
The Countdown Begins
Forget the Wild West. The city's authorities are building a digital panopticon, aiming to pierce the veil of anonymity that has long been a hallmark—and a headache—for crypto traders and tax collectors alike. The target? Unreported gains hiding in blockchain wallets.
Closing the Loophole
The plan mandates systematic information exchange between crypto service providers and tax bodies. It's a move that signals a seismic shift from passive observation to active enforcement. Trading platforms and custodians will soon have to hand over transaction records, linking digital pseudonyms to real-world identities.
A New Era of Accountability
This isn't just about catching a few rogue traders. It's about legitimizing the entire sector by dragging it into the light of fiscal responsibility. The message is clear: innovate, but pay your dues. The 2028 deadline gives the industry a runway to adapt—or to find new, creative ways to obfuscate, because where there's a tax rule, there's a workaround waiting in the wings. After all, what's finance without a little creative accounting?
Hong Kong’s CRS Financial Data Exchange
Hong Kong has also been automatically sharing financial account information annually with partner jurisdictions under the CRS since 2018, enabling tax authorities to utilize this data to make assessments and to identify tax evasion.
The CARF extension is an expansion of this framework, with its transparency standards applicable to crypto assets, trading billions of dollars on the licensed exchanges of the city. The government proposes to have financial institutions required to be registered to enhance identification and more stringent penalties enforced.
These are in reaction to the second-round peer review by the OECD of the CRS administrative framework in Hong Kong, which commenced in 2024 and assesses the city’s adherence to international standards of tax transparency.
The consultation follows the Hong Kong balancing act between the necessity to promote the development of digital assets and the need to meet international regulatory standards. The city has been actively engaged in fintech growth by its Fintech 2030 strategy, introduced by the Hong Kong Monetary Authority, which emphasizes data, artificial intelligence, resilience, and tokenization within the DART framework.
Hong Kong has promoted crypto operations via licensing regimes and spot crypto exchange-traded funds with the aim of offering regulatory platforms to fulfill demand.
Crypto Market Regulations Focus on Speculative Token Holdings
The Chief Executive of the Securities and Futures Commission, Julia Leung, has recently declared that licensed crypto exchanges will soon be linked to global order books, breaking the isolated trading model of the city and enabling local platforms to access wider liquidity.
Although the regulatory framework is open to innovation, regulators have created specific differences between the infrastructure of markets and listed issuers who depend on speculative holdings of tokens.
The stock exchange questioned at least five companies that tried to transition to crypto treasury formats, and the SFC cautioned retail traders about dangers related to digital asset treasury structure, especially following notice of notable premiums over asset holdings.
With these developments, HashKey Holdings is closer to becoming the first asset to be publicly listed on a crypto exchange in Hong Kong. The company has passed the listing hearing at the stock exchange and is preparing to launch at least $200 million through an initial public offering before the end of the current year.
HashKey controls more than three-fourths of all onshore digital asset trades in Hong Kong and documented HK$1.3 trillion in cumulative spot-market deals.
