Global Trustee and Fiduciary Services Bite-Sized Issue 9 2025

CRYPTOASSETS SFC Elaborates on Robust Custody Standards for VATP to Safeguard Client Virtual Assets On 15 August 2025, the Securities and Futures Commission (SFC) set out its expectations in a Circular to all licensed virtual asset trading platforms (VATPs) on ensuring the robust custody of client virtual assets, in order to lay a solid foundation for the industry’s transition to more advanced custody technologies under the “ASPIRe” roadmap. The SFC states that it sees the need for VATPs to critically review and strengthen their custody practices at a time when multiple cases of custody vulnerabilities have arisen overseas, and the regulator’s own targeted review aimed to evaluate VATPs’ resilience against cybersecurity threats earlier this year revealed inadequacies in some operators’ controls. The SFC says that multiple cybersecurity incidents at overseas virtual asset platforms resulting in significant client asset losses have also highlighted persistent risks to custody globally. Key weaknesses in wallet infrastructures and controls include compromised third-party wallet solutions, insufficient transaction verification processes, and inadequate access controls over approval devices. In its latest circular, the SFC says that it has provided examples of good practices along with its expected minimum standards that VATP operators must meet, covering senior management responsibilities, client cold wallet infrastructure and operation, use of third-party wallet solutions, real-time threat monitoring and others. Going forward, the SFC says that these standards will also form the core expectations for virtual asset custodians and help foster an effective industry-wide framework for virtual asset custody. Link to Circular here Joint Statement by the SFC and the HKMA on Stablecoin-related Market Movements On 14 August 2025, the SFC and the Hong Kong Monetary Authority (HKMA) issued a joint statement on recent market movements in relation to stablecoins. The SFC and the HKMA have noted recent abrupt market movements linked to the stablecoin concept. These movements appear to follow corporate announcements, news reports, social media posts or speculations regarding plans to apply for stablecoin issuer licence, engage in related activities or explore the feasibility of such initiatives in Hong Kong. The HKMA reiterates that it adopts a robust and prudent approach, with a reasonably high bar, in considering applications for stablecoin issuer licence. The HKMA emphasises that an indication of interest or application for a stablecoin licence, and the HKMA’s communication with the interested entities are just part of the licensing process. The granting of licence will be determined by the fulfilment of the licensing criteria. Investor Services Bite-Sized Global Trustee and Fiduciary Services QUICK LINKS Issue 9 | 2025 CRYPTOASSETS CYBERSECURITY EMIR (UK) FINTECH MIFID/MIFIR (UK) SUSTAINABLE FINANCE/ESG T+1 ASIA PACIFIC AUSTRALIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM