‍#Gate广场四月发帖挑战

Say goodbye to the “gray zone”—crypto assets in Hong Kong will be “fully transparent”

Hong Kong is pushing forward the Crypto Asset Reporting Framework (CARF) and CRS 2.0 legislation, which are expected to take effect starting in 2027, with information exchange launched in 2028. According to the latest progress, on April 1, 2026, Hong Kong submitted the “2026 Tax (Amendment) (Automatic Exchange of Information) Ordinance Bill” for first reading, marking the official entry of CARF and CRS 2.0 into the legislative process. This move aims to comprehensively align with the new global tax transparency standards published by the OECD, achieving “full transparency” regulation of crypto assets and cross-border accounts.

👉 Crypto assets are no longer “secret”

The upgrade of this regulatory bill brings four major key changes:

1. Crypto assets bid farewell to “tax invisibility”: Bitcoin, Ethereum, stablecoins, NFTs, and others are all included in the reporting scope. Virtual Asset Service Providers (VASPs) must fulfill KYC and data reporting obligations. Relying on crypto assets to conceal wealth is no longer feasible.

‌2. Dual tax residents cannot “choose one to declare”: They must disclose account information to all tax jurisdictions, completely closing loopholes for identity switching and tax evasion;

‌3. Strengthened “penetrative” supervision: Financial institutions must identify the Ultimate Beneficial Owner (UBO). Offshore “three-no” companies with no real operations will be subject to targeted audits;

‌4. Compliance thresholds are raised comprehensively: Financial institutions will have mandatory registration requirements, data retention periods will be extended, and the penalty mechanism will be calculated cumulatively based on the number of accounts, significantly increasing the cost of non-compliance.

👉 Core timeline for the regulations to take effect

‌In 2026‌: Complete the legislative process and establish compliance details;

‌January 1, 2027‌: CARF rules take effect, and crypto asset service providers begin collecting customers’ tax information;

‌2028‌: Launch the first cross-border exchange of crypto asset information;

‌2029‌: Fully implement the complete CRS 2.0 requirements for full information exchange.

👉 What changes for cryptocurrencies

1. Trading coins may require you to pay taxes

Note that this is not about a “hustle tax,” but real taxes. The CARF regulatory bill will officially include electronic money and central bank digital currency (CBDC). CRS 2.0 will bring electronic money service providers and the accounts they maintain into the scope of “deposit accounts,” treating them the same as commercial banks. This means accounts holding digital fiat currency will be fully reported.

In addition, indirectly held crypto assets will also be covered through the “penetration” approach. The CRS 2.0 revision to the definition of “investment entities” will extend the pathways for indirect holding of crypto assets as well—if you indirectly hold crypto assets through fund shares or derivatives, you are also within the reporting scope.

2. Pressure increases for DeFi and self-custody wallets

Although decentralized protocols are not directly constrained for the time being, interfaces with centralized platforms (such as fiat on-ramps and cross-chain bridges) will become the regulatory leverage point, indirectly driving on-chain activities toward standardization.

3. Short-term negative for the market, long-term positive

In the short term, some coin-trading veterans may retreat due to rising compliance and tax costs, leading to worse market liquidity and a temporary drop in coin prices. But in the long run, it benefits the inflow of traditional institutional capital, improving the market’s overall depth and stability. Previously, traditional financial institutions such as Goldman Sachs and Morgan Stanley had taken a cautious stance due to uncertainty around compliance; now that the regulatory framework is clearer, they are expected to expand their plans in areas such as ETFs, staking, lending, and more.