SlowMist and the road to security and compliance of crypto assets in Hong Kong

Since its establishment in 2018, SlowMist has always focused on the security construction of the blockchain ecosystem. The team has more than ten years of practical experience in network security and has developed into one of the world's leading blockchain security companies. The service scope covers security auditing, threat intelligence, security monitoring, defense deployment and security consulting. Clients include OKX, Binance, HashKey, OSL and other industry-leading companies.

While continuously expanding its security capabilities, SlowMist also attaches great importance to the construction of a compliance system, continues to pay attention to regulatory trends, and improves the level of audit services to meet the compliance requirements of institutions such as the Hong Kong Securities and Futures Commission (HKSFC) and the Hong Kong Monetary Authority (HKMA).

In 2023, SlowMist provided comprehensive security audit services for HashKey, and its compliance security audit report was recognized by HKSFC, helping HashKey successfully obtain a license. Since then, SlowMist has successively provided audit services to OSL, DFX, YAX, HKBGE, MEEX and other platforms, and based on HKSFC's 23 major compliance requirements and OWASP international standards, combined with its own security capabilities, it has developed a HKSFC compliant exchange security audit service specifically for the Hong Kong market, helping customers meet local regulations while complying with international security standards.

On the basis of the continuous expansion of compliance audit capabilities, SlowMist further covers the real-world asset (RWA) scenario based on HashKey Chain, and launches compliance security audit services for tokenized financial products. In view of the characteristics of security token issuance, it provides multi-dimensional audits of smart contracts, infrastructure and compliance. Related services have been successfully applied to projects such as HashKey Cloud, HBS MMF, Bosera HKD Money Market ETF, Bosera USD Money Market ETF, VPG HKDMMF (VPGHKD), etc., and continue to help the Hong Kong blockchain ecosystem develop steadily under the regulatory environment.

On July 18, 2024, the Hong Kong Monetary Authority (HKMA) announced the participants of the stablecoin issuer sandbox. SlowMist is honored to provide security audit support for the stablecoin project for one of the issuers, Yuanbi Innovation.

SlowMist's audit reports have been recognized by regulators in multiple jurisdictions. For example, the audit report issued by SlowMist for BTCBOX was recognized by the Japanese Financial Services Agency (JFSA); the audit report issued for Bitget was recognized by the US Financial Crimes Enforcement Network (FinCEN); and the audit report issued for BHEXSG was recognized by the Monetary Authority of Singapore (MAS). These successful cases fully demonstrate SlowMist's professional capabilities and international trust in the field of global compliance and security audits.

The Evolution of Hong Kong’s Stablecoin Regulatory Framework

The development of Hong Kong's stablecoin regulatory framework took three and a half years. Since the release of the discussion document in 2022, it has gone through multiple rounds of public consultation, Legislative Council deliberations and sandbox program pilots, and is expected to be officially implemented in 2025. This gradual and meticulous legislative process reflects the cautious attitude and forward-looking vision of Hong Kong regulators in the field of crypto assets. By fully absorbing industry feedback and benchmarking against international standards, a robust regulatory system that is both globally compatible and in line with local market realities has finally been formed.

This prudent legislative approach means that the final (Stablecoin Ordinance) and its related guidelines will be more complete and enforceable. For market participants, once compliance is achieved, their business will have stronger institutional certainty and sustainable development potential. At the same time, this also places higher demands on service providers - such as SlowMist, which needs to continue to track policy evolution, deeply understand regulatory logic, and continuously strengthen technical and auditing capabilities to help Hong Kong's crypto asset ecosystem develop safely and steadily, and provide comprehensive compliance and security support for stablecoin issuers.

The following are important milestones for stablecoin regulation in Hong Kong:

Key points of Hong Kong’s stablecoin regulatory framework

Following the passage of the Stablecoin Ordinance, the Hong Kong Monetary Authority (HKMA) published the Draft Regulatory Guidelines for Licensed Stablecoin Issuers on May 26, 2025. The draft aims to ensure the stability, security and proper functioning of the stablecoin ecosystem in Hong Kong. It details the requirements that licensed issuers must meet on an ongoing basis, covering key areas of operations and governance:

  • Reserve Asset Management

  • Issuance, Redemption and Distribution

  • Business Activities

  • Financial resources

  • Risk Management

  • Corporate Governance

  • Business Practices and Conduct

It is worth noting that the "risk management" section in the (draft guidelines) accounts for more than half of the content, which fully reflects the Hong Kong Monetary Authority's high attention to the risk control capabilities of stablecoins.

The SlowMist Security Team conducted a systematic analysis of the entire process from the release of the discussion document in 2022 to its formal entry into force in 2025. Together with ecological partners, they jointly developed the "Stablecoin Risk Management and Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT) Compliance Security Solution":

Note: This plan aims to analyze some of the core compliance requirements in the (Draft Regulatory Guidelines for Licensed Stablecoin Issuers) and recommend corresponding technical solutions and implementation paths based on SlowMist's practical experience in blockchain security, compliance auditing and risk management. However, the compliance requirements covered by the (Draft Guidelines) are extensive and complex, involving multiple dimensions such as technology, operations, governance, and anti-money laundering (AML/CFT). This plan only focuses on the interpretation of some key terms and provides response strategies, and does not constitute a complete coverage of all requirements of the (Draft Guidelines).

In addition, the compliance system of stablecoin issuers needs to be continuously optimized in combination with business scenarios, technical architecture and regulatory dynamics. The solutions listed in this plan are based on the analysis of current technical capabilities and industry practices, and may need to be further adjusted and supplemented according to actual business needs, technological evolution and changes in the regulatory environment. It is recommended that issuers, based on their own business characteristics, continue to communicate with professional compliance and security service providers (such as SlowMist Technology) and refer to the latest guidance of relevant regulatory authorities to ensure the integrity and effectiveness of the compliance system.

Summarize

As Hong Kong’s crypto asset regulation becomes increasingly mature, stablecoin issuers are facing a new stage of opportunities and challenges. With the blockchain security capabilities accumulated since 2018, SlowMist has become an important participant and trusted partner in Hong Kong’s stablecoin compliance and security audits.

SlowMist provides a full range of security solutions covering both on-chain and off-chain, including key links such as smart contract auditing, infrastructure security, key management and data protection. Through self-developed tools such as MistTrack and AML systems, it assists issuers in building an AML/CFT framework that meets the requirements of the HKMA to prevent illegal capital risks. Under the regulatory approach of Hong Kong that emphasizes "continuous risk management", SlowMist provides 7×24-hour security monitoring and intelligence support through MistEye, helping stablecoin projects move from passive response to active risk control.

The successful cooperation between SlowMist and the first batch of licensed virtual asset service providers in Hong Kong further proves that SlowMist can provide strong compliance and security guarantees for Hong Kong stablecoin issuers with its world-leading technical strength, comprehensive service system, profound industry experience and deep understanding of Hong Kong's local regulatory environment. As the security cornerstone of the crypto asset field, SlowMist will continue to be committed to promoting the steady development of Hong Kong's stablecoin market and helping Hong Kong consolidate its position as an international Web3 financial center.

Acknowledgements

SlowMist sincerely thanks InvestHK, HashKey, Yuanbi Technology, Amber Group, RigSec and Akamai for their long-term trust and support. It is with the continuous investment and support of all parties in the blockchain security and compliance ecosystem that the "Stablecoin Risk Management and Anti-Money Laundering / Counter-Terrorist Financing (AML / CFT) Compliance Security Solution" has been continuously improved, providing the industry with a clear compliance path and technical guarantee.

References

[1] Hong Kong (Stablecoin Ordinance)

https://www.legco.gov.hk/yr2025/chinese/ord/2025ord017-c.pdf

[2] Hong Kong (Consultation on Draft Regulatory Guidelines for Licensed Stablecoin Issuers)

https://www.hkma.gov.hk/media/eng/regulatory-resources/consultations/20250526_Consultation_on_Draft_Guideline_on_Supervision_of_Licensed_Stablecoin_Issuers.pdf

[3] Hong Kong (Consultation on Proposed Anti-Money Laundering and Counter-Terrorist Financing Requirements for Regulated Stablecoin Activities)

https://www.hkma.gov.hk/media/eng/regulatory-resources/consultations/20250526_Consultation_Paper_on_the_Proposed_AMLCFT_Req_for_Regulated_Stablecoin_Activities.pdf