Hong Kong’s SFC Enters a New Era of Digital Asset AML Oversight with ASPIRe Roadmap

The Securities and Futures Commission (SFC) of Hong Kong has moved into a decisive new phase in reshaping anti-money laundering and compliance standards for digital asset funds. The regulator’s ASPIRe roadmap—first unveiled in early 2025 and reinforced at a recent industry seminar—signals a definitive shift from a period of regulatory experimentation toward an institutional-grade compliance regime. Under this new model, every participant in Hong Kong’s virtual asset ecosystem will be held to elevated standards of governance, investor protection, and AML enforcement. The framework positions Hong Kong as a global benchmark for anti-money laundering controls in tokenised and digital asset markets.

Built on five core pillars—Access, Safeguards, Products, Infrastructure, and Relationships—the ASPIRe framework represents a fusion of financial innovation with disciplined risk management. It redefines AML supervision as a central pillar of market integrity rather than an auxiliary requirement. The SFC recognises that tokenised and digital asset funds pose unique vulnerabilities: cross-border capital flows, obscure ownership structures, and reliance on intermediaries operating under uneven regulatory standards.

To address these challenges, fund administrators, custodians, and virtual asset service providers (VASPs) are now required to adopt the “same business, same risks, same rules” standard. In practical terms, this means that AML and counter-terrorism financing (CTF) obligations applied to traditional finance must also govern blockchain-based markets. Hong Kong already mandates licensing for VASPs, compulsory customer due diligence, ongoing transaction monitoring, and asset segregation. Under ASPIRe, these requirements are being expanded to cover over-the-counter dealers and custodians, ensuring every participant in the fund distribution network is accountable for mitigating financial crime risks.

The emphasis on licensing serves a deeper purpose than mere regulatory compliance. It acts as a gatekeeping mechanism designed to exclude intermediaries incapable of demonstrating robust AML capacity. Through its Access pillar, ASPIRe ties market entry directly to verifiable compliance performance, aiming to attract credible global operators while deterring those seeking to exploit jurisdictional loopholes.

Meanwhile, the Safeguards pillar reorients compliance expectations around measurable outcomes. Rather than rewarding box-ticking exercises, the SFC intends to promote effectiveness-based approaches—encouraging firms to demonstrate tangible risk mitigation results. This proportionate model allows space for technological innovation within defined risk boundaries, ensuring that fundamental AML functions such as screening, reporting, and monitoring remain uncompromised.

The SFC’s roadmap also grapples with the complex realities of tokenisation, a key pillar of Hong Kong’s fintech evolution. The digitisation of funds, bonds, and securities enables rapid, borderless transfers that bypass conventional intermediaries. While this boosts efficiency, it introduces new blind spots in AML surveillance. The regulator acknowledges that without data integration and real-time intelligence exchange, tokenised assets could easily become channels for layering and integration of illicit proceeds.

To mitigate these risks, the Infrastructure pillar of ASPIRe outlines a blueprint for a unified oversight system incorporating blockchain analytics, wallet tracking, and real-time transaction reporting. This infrastructure will allow the SFC to identify irregular patterns before they escalate into financial crime. Collaboration with law enforcement will be central to this effort, enabling cross-jurisdictional asset tracing and recovery across both centralised and decentralised networks.

The roadmap’s technology-driven direction mirrors a broader global recognition that traditional AML models are ill-suited to decentralised markets. By promoting straight-through data reporting and deploying analytics that visualise wallet interconnections, Hong Kong aims to strengthen its ability to detect laundering typologies unique to the crypto ecosystem—such as mixing, privacy coin circulation, and chain-hopping.

The hybrid nature of tokenised funds, straddling both traditional and decentralised finance, demands parallel compliance strategies. Managers must maintain custody safeguards comparable to those of conventional asset managers while applying on-chain analytics to preserve transparency over token movements. The SFC explicitly calls for independent audits, insurance coverage, and advanced cold-hot storage systems—measures designed to reinforce asset integrity and limit AML exposure.

A defining element of the ASPIRe roadmap lies in its fifth pillar—Relationships—focused on education, communication, and cultural change. The SFC recognises that effective AML resilience is as much a human issue as a technological one. Hong Kong’s growing retail crypto investor base increasingly turns to online commentators for investment advice, many of whom operate outside any regulatory perimeter. These “finfluencers” often amplify misinformation and speculative activity, inadvertently facilitating fraud and money laundering.

To counter this, the SFC intends to implement a dedicated regulatory framework for financial influencers, extending disclosure and suitability obligations into digital communications. This initiative represents one of the world’s first attempts to integrate social media accountability into AML oversight. By holding these information intermediaries to higher standards, the SFC aims to close a key gap that has historically enabled scams, wash trading, and untraceable investor losses.

The education drive extends beyond retail engagement. In coordination with the Virtual Asset Consultative Panel, the SFC plans to elevate compliance literacy among fund managers, administrators, and custodians. Ongoing training in emerging AML typologies, data analytics, and policy developments will be embedded within professional practice. The regulator’s approach seeks to foster a culture where compliance is dynamic, evolving alongside market risks rather than reacting to them.

Equally important, the SFC’s open engagement strategy aims to prevent regulatory lag. Through ongoing dialogue and real-time feedback, the Commission hopes to ensure that compliance standards remain responsive to rapid technological shifts. This cooperative model redefines the relationship between regulator and industry, treating compliance not as a constraint but as a collaborative tool for sustainable market growth.

The ASPIRe roadmap ultimately transforms Hong Kong’s AML framework from a compliance exercise into a trust mechanism. It is designed to strengthen investor confidence while safeguarding the city’s reputation as a global financial hub. Success, however, depends on consistent implementation across several fronts—expanding licensing, deploying surveillance systems, enhancing cross-agency data exchange, and reshaping market behaviour.

For fund managers, the implications are immediate and structural. AML obligations must be built directly into product architecture. Tokenised funds will be required to integrate chain-analysis software, automate red-flag alerts for suspicious transactions, and ensure custodial partners meet SFC risk standards. Firms that fail to meet these expectations face exclusion from Hong Kong’s digital asset market.

The roadmap also emphasises international cooperation to prevent regulatory arbitrage. By aligning its framework with FATF standards and enforcing the travel rule, Hong Kong seeks to remain interoperable with global AML regimes. The SFC’s commitment to cross-border harmonisation signals its determination to maintain regulatory equivalence with leading jurisdictions.

Acknowledging operational challenges in custody and insurance, the roadmap encourages flexibility through risk-based models that reduce compliance costs without weakening safeguards. Allowing VASPs to calibrate storage ratios and compensation structures according to business profiles promotes innovation while retaining accountability—a balance reflecting the regulator’s pragmatic approach to market development.

Looking ahead, the convergence of artificial intelligence and blockchain analytics is expected to define the next chapter of AML supervision. Predictive algorithms can uncover complex laundering typologies invisible to conventional systems, while tokenised transaction data, if properly integrated, provides unprecedented traceability. The SFC’s investment in modern infrastructure underscores its intent to transform AML compliance from a reactive process into a proactive, intelligence-driven capability.

At its core, the ASPIRe roadmap embodies a broader shift toward shared responsibility. AML compliance in Hong Kong’s digital asset sector is no longer confined to licensed institutions—it extends to investors, developers, and content creators who shape market behaviour. This distributed accountability model redefines financial integrity not as a regulatory burden but as a collective standard for a maturing digital economy.

By fLEXI tEAM