Hong Kong SFC Mandates Passkey Security for Crypto Platforms and Brokers

Key Facts

In a move reflecting a strategic shift toward robust digital market infrastructure, Hong Kong’s Securities and Futures Commission (SFC) has issued new mandates for crypto platforms and online brokers to upgrade their security protocols. According to reports, the regulator has ordered the phasing out of traditional one-time passwords (OTP) in favor of phishing-resistant passkeys. This intervention follows a recorded 57% surge in spoofing attacks targeting retail accounts, with the SFC granting entities a 12-month window to achieve full compliance with the new standards.

This regulatory tightening comes amid increasing pressure to protect retail investors, as security experts have long warned that SMS and email-based two-factor authentication are vulnerable to sophisticated hacking. Hong Kong’s new standards align with global trends seen in major tech firms like Google and Apple, which have accelerated the adoption of passkey technology to eliminate password-related risks. Per market data, while compliance costs may impact the margins of smaller platforms in the short term, the move is expected to bolster long-term institutional trust in the region's digital asset ecosystem.

Looking ahead, while specific instrument prices are unavailable at this time, market participants will closely monitor the technical implementation progress of major brokers before the 2027 deadline. On the economic calendar, traders should watch for the OPEC meeting on July 5, 2026, and the Australian interest rate decision on July 7, 2026. These events are likely to influence broader market sentiment in Asia, potentially impacting liquidity flows across the digital trading platforms affected by these new security mandates.