One year before CARF implementation, digital assets need more than another screenshot

Separate the reporter from the data provider

The Hong Kong Government has introduced the relevant 2026 amendment bill. Under the IRD's current proposal, if enacted, reporting crypto-asset service providers with a Hong Kong nexus would face registration, due-diligence and reporting obligations from 1 January 2027; Hong Kong targets its first automatic exchange in 2028.

The direct reporting duty largely falls on qualifying providers. Clients and controlling persons nevertheless need self-certifications, tax-residence information and transaction data. A holder should neither assume it is an RCASP nor assume it has nothing to prepare.

For cross-border platforms, identify the contracting entity

A provider can have reporting nexus through tax residence, incorporation, management or a permanent establishment. Brand location is insufficient. Families should identify the contracting entity, custody entity, terms of service and the legal person named on statements.

Three transaction types require underlying records

Relevant transactions include exchanges between crypto-assets and fiat currency, exchanges among crypto-assets and transfers—including transfers to external wallets. Even without a sale, records should identify the source, destination, beneficial-owner change and the fair-value and exchange-rate convention used.

A year-end profit figure or screenshot cannot reconstruct the chain. NFTs, decentralised platforms, staking and cross-chain assets require consistent identifiers and valuation fields.

A reconcilable ledger has at least four layers

The asset layer records identifiers, chain, quantity and valuation source; the account layer records platform, address, custody and controller; the legal-entity layer records holder, source of funds and authority; the tax layer records residence, self-certification version, TIN and provider entity.

Changes require effective dates and version history rather than overwriting. The proposal also includes a six-year retention period for records supporting due diligence and reporting accuracy, subject to the final law and guidance.

G70 perspective: prepare data ownership first

The remainder of 2026 can be used to inventory every platform and wallet, separate personal/company/trust holdings, download original transaction files and test whether year-end balances reconcile to each transfer.

Technology can import transactions. It cannot decide legal ownership, beneficial control or tax residence. Readiness means that one consistent evidence set can explain each transfer.