Hong Kong’s SFC proposes expanding crypto regulatory staff in new fiscal budget

Hong Kong’s securities watchdog has proposed adding headcounts for cryptocurrency-specific staff as the region continues its drive to become a crypto hub.

In a budget plan for the financial year 2025 to 2026, the Securities and Futures Commission proposed 15 new headcounts, with eight dedicated to “enhancing the staffing support for virtual asset regulatory regimes, market surveillance, and enforcement investigations.”

The SFC presented the budget on Monday at a Legislative Council meeting . The regulator estimated that its recurrent expenditure for the next fiscal year—starting April 1, 2025—would be HK$2.59 billion ($332.4 million), an increase of 7.2% from the forecast expenditure for 2024-25.

Much of the budget increase stems from a rise in staff costs by HK$130.5 million ($16.7 million), which includes an average salary hike of about 2.1%. The SFC noted that it froze its headcount in three out of the five financial years since 2020-21.

The SFC pointed out in a separate document on Monday that it has deployed staff with experience in licensing and supervision to cope with crypto-related regulatory work. However, it could only conduct on-site inspections of some 200 licensed corporations in 2023, which “fell short of the target of 300.” 

Hong Kong has opened its doors to crypto firms. In June 2023, it officially launched a crypto licensing regime for “virtual asset trading platforms” (VATPs), allowing licensed exchanges to offer retail trading services. The government’s proposed stablecoin bill is also progressing through the Legislative Council.

In December, the SFC said it has worked to speed up the VATP licensing process. “We have been proactively engaging with VATPs’ senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs,” Eric Yip, the SFC’s Executive Director of Intermediaries, said in a December statement.

Last month, the SFC approved licenses for two additional crypto trading platforms — PantherTrade and YAX, according to the regulator’s website . This brought the total number of licensed platforms to nine, including OSL and HashKey.