Crypto Tax Evasion Targeted by Hong Kong with 2028 Data Sharing Plan

• Crypto tax consultation was launched in Hong Kong, aiming for a 2028 information exchange.
• Public feedback on Hong Kong’s crypto tax consultation is open until February 2026.
• Hong Kong pushes crypto transparency while navigating Beijing’s stablecoin crackdown.

Hong Kong has started its consultation of the OECD crypto tax reporting structure, and a goal is to automatically exchange digital asset information with other countries by 2028 in a bid to eliminate cross-border tax evasion.

Hong Kong has started a public consultation on the adoption of the OECD Crypto-Asset Reporting Framework (CARF) and the updated Common Reporting Standard (CRS) and intends to start automatically exchanging crypto tax information with partner jurisdictions by 2028.

The government seeks to complete legislative changes by the year 2026 as a way of affirming the commitment of the city to international cooperation on taxation as it seeks to maintain its position as a global financial hub to counter the changing landscape of digital asset regulation.

Financial Services Secretary Christopher Hui said Hong Kong will revise the Inland Revenue Ordinance (Cap. 112) so as to adopt CARF and the updated CRS as it focuses on cracking down on cross-border tax evasion.

The automatic exchange of information will be two-way, meaning that all partners will follow rules to keep data private and secure, and the full use of the updated CRS will happen in 2029.

Source: The Standard

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.

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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.

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