Compliance Daily · 2026-11-05. This digest covers compliance news verified for that day from 00:00 to before 00:00 the following day, Beijing time, and will not be changed after finalization.
01Hong Kong Legislative Council passes the Crypto-Asset Reporting Framework and amended CRS bill
On November 4, the Hong Kong Legislative Council passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026, which involves two sets of rules implemented in phases. The Crypto-Asset Reporting Framework (CARF) takes effect on January 1, 2027; qualifying service providers will begin collecting information in 2027, and Hong Kong plans to begin exchanges with relevant tax jurisdictions in 2028. The amended Common Reporting Standard (CRS) takes effect on January 1, 2028, and Hong Kong plans to begin exchanging financial account information under the new standard in 2029. Under the original bill, for users whose relationships were established on or before December 31, 2026, service providers must obtain self-certifications on or before January 1, 2028; when new users open accounts, service providers must obtain certifications and verify their reasonableness. Self-certifications must state the name, address, tax residence jurisdiction(s) and tax identification number(s); if a person is a tax resident of both jurisdictions under their respective laws, all applicable jurisdictions should be stated truthfully.
Business impact
The reporting chain consists of three stages: collection of information by platforms, reporting to the Hong Kong Inland Revenue Department, and exchange between Hong Kong and other jurisdictions. Whether information is ultimately exchanged depends jointly on the user's tax residence status, the exchange's operating entity, the transaction type and the reporting list published by Hong Kong. For exchanges and brokers operating in Hong Kong, information collection starting in 2027 and obtaining supplementary self-certifications for existing accounts are clear compliance obligations, and tax residence identification and reasonableness verification need to be embedded in account-opening and customer information update processes. The use of Hong Kong platforms by mainland tax residents does not automatically preclude information exchange, but the exchange outcome depends on the specific arrangements between Hong Kong and the relevant jurisdictions; at this stage, it should not be presumed on that basis that transaction records will necessarily be transmitted back to the mainland.
Key points to note
- Check whether you are an existing customer who opened an account on or before December 31, 2026
- Confirm whether the platform has requested supplementary submission and verification of tax residence self-certifications
- Determine whether you are simultaneously a tax resident under the laws of both jurisdictions and state this truthfully
02Hong Kong Financial Services and the Treasury Bureau: international platforms coming to Hong Kong must comply with regulation; a new bill will be submitted to expand the scope of regulation
Christopher Hui Ching-yu, Acting Secretary for Financial Services and the Treasury of Hong Kong, stated regarding efforts to attract international virtual asset trading platforms to establish operations in Hong Kong that Hong Kong currently has 13 virtual asset trading platforms (VATPs) formally licensed by the Securities and Futures Commission (SFC). Any international platform may submit an application so long as it meets statutory and regulatory requirements, and the SFC and Invest Hong Kong continue to engage with such platforms to explain compliance requirements and market opportunities. Hui noted that the HKSAR Government and the SFC attach great importance to the quality of licensed institutions in order to manage risk and protect investors. A bill will shortly be formally submitted to the Legislative Council to bring more types of virtual asset services within the regulatory framework, while the products and services that licensed platforms may offer will continue to be broadened. Under the current regulatory requirements, applying for a licence in Hong Kong requires, in addition to obtaining Type 1 (dealing in securities), Type 7 (providing automated trading services) and AMLO licences, the establishment of a non-shell physical operating premises in Hong Kong and the appointment of at least two approved Responsible Officers (ROs), at least one of whom must ordinarily reside in Hong Kong and bear personal compliance responsibility.
Business impact
The current licensing threshold already rests on two hard conditions: physical operating premises and Responsible Officers. The applicant must have a non-shell office premises in Hong Kong and appoint at least two approved Responsible Officers, one of whom ordinarily resides in Hong Kong and bears personal compliance responsibility; failing to meet these conditions means the Type 1, Type 7 and AMLO licence applications cannot be completed. Once the proposed bill is passed, more types of virtual asset services will be brought within the licensing framework, and business models originally outside the licensing scope may become subject to licensing, while the broadening of products and services will depend on the SFC's subsequent specific arrangements. Before the text of the bill is published, international platforms may prepare application materials in accordance with the current three-licence requirements, but should not treat the proposed expansion as an already effective obligation when adjusting their business.
Key points to watch
- Verify whether the Hong Kong operating premises is a non-shell entity
- Confirm that at least one of the two Responsible Officers ordinarily resides in Hong Kong
- Track the types of services covered after the bill is submitted
03Greek Parliament passes cryptocurrency capital gains tax bill at a rate of 10%
The Hellenic Parliament passed a bill on November 5 imposing a 10% tax on cryptocurrency capital gains, with an exemption for annual capital gains not exceeding EUR 500 (approximately USD 563). This is Greece's first comprehensive legal framework for taxing crypto assets. A senior official of the Greek Ministry of Finance stated that further implementing rules will be published in the coming weeks to clarify transparency and audit rules. The bill has been passed by Parliament, while the specific implementing rules and the transparency and audit rules remain to be published subsequently by the Ministry of Finance.
Business impact
Following passage of the bill, individuals and entities that realize gains from the disposal of crypto assets in Greece will fall within the scope of the 10% capital gains tax, with annual gains not exceeding EUR 500 exempt and the excess subject to tax on capital gains. Because the transparency and audit rules have not yet been published, the reporting basis, calculation method and documentary requirements remain to be clarified, and whether trading platforms and custodians will bear information-reporting obligations also depends on the subsequent implementing rules. Before the rules take effect, relevant parties may first review their own taxable disposal activities in Greece and the scale of their annual gains, but should not adjust internal processes according to audit requirements that have not yet been published.
Key points to watch
- Confirm the applicable basis for the EUR 500 annual capital gains exemption
- Track the transparency and audit rules in the Ministry of Finance's implementing rules
- Verify whether trading platforms are subject to information-reporting obligations
04Fed's Hammack: smart contracts and AI agents may drive stablecoin demand; regulatory uncertainty may slow adoption
Beth M. Hammack, President of the Federal Reserve Bank of Cleveland, delivered a speech titled "Reserve Currencies and Stablecoins" in Zurich, Switzerland, on November 5, 2026, noting that stablecoins may have technical advantages over traditional payment methods, such as the ability to execute smart contracts or implement intelligent agent workflows. She stated that these features may increase demand for stablecoins and thereby drive up demand for U.S. dollar assets. Hammack also noted that current U.S. regulatory statutes do not directly address the application of smart contracts or intelligent agent artificial intelligence to the payments field, and that the absence of a clear regulatory framework may cause U.S. financial institutions to make slow progress in adopting these technologies. The foregoing reflects judgments and statements made in the speech and does not constitute regulatory rules already in effect.
Business impact
What Hammack identifies is the gap at the U.S. federal level where current rules do not directly cover the use of smart contracts and intelligent agent artificial intelligence in payments; those constrained are financial institutions engaged in stablecoin issuance, payments and distribution in the United States: before the rules are clarified, adoption of such technologies lacks a compliance basis that can be invoked, and the pace of progress may slow. For enterprises intending to use smart contracts for clearing and settlement or to initiate payments through AI agents, the more realistic approach at this stage is to assess the technical solution separately from existing payment, reserve and redemption obligations, rather than treating the speech's statements as an access signal.
Key points to watch
- Check whether current U.S. rules directly cover smart contract payments
- Confirm whether payments initiated by AI agents fall within the scope of existing regulation
05Zilliqa announces shift from standalone Layer 1 to an Ethereum Layer 2, establishing a permissioned market for regulated institutions
Zilliqa has announced that it will shift from a standalone Layer 1 to an Ethereum Layer 2 named Zilliqa Institutional Layer (ZIL), positioned for regulated institutions. Zilliqa states that usage of the original chain is insufficient to support standalone operation; the new network will have settlement security provided by Ethereum, built-in identity and compliance mechanisms, and a permissioned market for verified institutions to transact. The token will remain ZIL. Zilliqa states that token holders currently need take no action, and that relevant technical details will be published before the change. Zilliqa was founded in 2017 by a research team from the National University of Singapore (NUS) and is an early public blockchain project to implement sharding technology; between late 2017 and early 2018 it raised approximately USD 22 million in total through a seed round and an ICO, with major investors including Polychain Capital, FBG Capital and NGC Ventures. The available materials do not disclose the specific timetable for the migration, the access rules for the permissioned market, or the specific arrangements for the identity and compliance mechanisms.
Business impact
By entrusting settlement security to Ethereum and placing institutional trading in a permissioned market, Zilliqa is in substance replacing the open participation of a public blockchain with an access structure screened by identity; those constrained are the institutions and their counterparties that wish to transact on the network. Built-in identity and compliance mechanisms mean that access conditions, the verifying entity and the manner in which verification results are used will directly determine whether institutions can open accounts and trade, while the technical details have not yet been published, so specific obligations cannot be assessed at this stage. Existing ZIL token holders are expressly told that no action is currently required, but whether the rights and uses of the token in the new network will change remains subject to the formal disclosure to be made before the change.
Key points to watch
- Institutional access conditions and the verifying entity for the permissioned market
- What data the identity and compliance mechanisms collect and for what purposes
- Whether ZIL's rights in the new network have changed
06FATF Report: Virtual Assets Have Become an Important Money-Laundering Channel for Scam Compounds, Calls for Strengthened Cross-Border Tracing and Asset Freezing
The Financial Action Task Force (FATF) has published a report on combating illicit financial flows linked to scam compounds, noting that virtual assets have become an important money-laundering channel for such criminal activity. According to the report, some scam compounds operate dedicated over-the-counter (OTC) counters that facilitate virtual asset exchange and domestic fund transfers. The report also calls for strengthened cross-border tracing and freezing of funds. The available material is an excerpt; the report's specific recommended provisions, the jurisdictions to which they apply, and subsequent procedural arrangements remain incomplete.
Business impact
The FATF recommendations do not in themselves directly impose obligations on exchanges or payment institutions, but their assessment results are typically transposed by member states into local regulatory requirements; consequently, cross-border exchange and OTC business involving fund flows linked to scam compounds will become priority targets of anti-money-laundering review. For service providers offering virtual asset-to-fiat currency exchange and cross-border settlement, the risk is that where a customer's fund chain is determined to be proceeds of fraud, obligations to freeze assets and report suspicious transactions will be applied at an earlier stage. Before member states have implemented specific rules, the report's recommendations should not be treated directly as existing compliance obligations.
Key points to note
- Verify whether the relevant FATF recommendations have been transposed in the relevant jurisdiction
- Confirm the customer source-of-funds review requirements applicable to OTC exchange business
- Clarify the trigger conditions for suspicious transaction reporting and asset freezing
See this issue's daily briefing in Global Regulatory Developments
