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SlowMist: Advancing Compliance and Security for Crypto Asset Development in Hong Kong

Since its founding in 2018, SlowMist has remained dedicated to strengthening the security of the blockchain ecosystem. Backed by over a decade of hands-on cybersecurity experience, SlowMist has grown into one of the world’s leading blockchain security firms. Its services span smart contract auditing, threat intelligence, security monitoring, defense deployment, and security consulting, with clients including top industry players such as OKX, Binance, HashKey, and OSL.

While continuously enhancing its security capabilities, SlowMist has also placed great emphasis on building compliance frameworks. The company actively monitors regulatory trends and improves its auditing standards to meet the requirements of institutions such as the Hong Kong Securities and Futures Commission (HKSFC) and the Hong Kong Monetary Authority (HKMA).

In 2023, SlowMist provided a comprehensive security audit for HashKey, whose compliance audit report was recognized by the HKSFC, helping the platform successfully obtain its license. Since then, SlowMist has delivered audit services to a number of platforms, including OSL, DFX, YAX, HKBGE, and MEEX. Based on the 23 key compliance requirements of the HKSFC, international OWASP standards, and its own proven security expertise, SlowMist developed a tailored HKSFC-compliant security audit framework for Hong Kong exchanges — designed to help clients meet both local regulatory expectations and global security standards.

Building upon its growing compliance audit capabilities, SlowMist has extended its services to real-world asset (RWA) scenarios on the HashKey Chain, offering compliance-focused security auditing for tokenized financial products. These services include multidimensional audits covering smart contracts, infrastructure, and regulatory compliance tailored to security token offerings (STOs). Projects that have benefited from these services include HashKey Cloud, HBS MMF, Bosera HKD Money Market ETF, Bosera USD Money Market ETF, and VPG HKDMMF (VPGHKD) — contributing to the healthy and compliant development of Hong Kong’s blockchain ecosystem.

On July 18, 2024, the HKMA announced the participants of its sandbox program for stablecoin issuers. SlowMist is honored to support one of these participants — RD Technologies — by providing security audit services for its stablecoin project.

SlowMist’s audit reports have also received recognition from regulatory authorities across multiple jurisdictions. For instance:

• Its audit report for BTCBOX was recognized by the Japan Financial Services Agency (JFSA);
• The report for Bitget was acknowledged by the U.S. Financial Crimes Enforcement Network (FinCEN);
• The audit for BHEXSG received approval from the Monetary Authority of Singapore (MAS).

These successful cases underscore SlowMist’s professional expertise and growing trust in the global compliance and security auditing landscape.

The Evolution of Hong Kong’s Stablecoin Regulatory Framework

The development of Hong Kong’s regulatory framework for stablecoins has spanned over three and a half years. Since the release of the initial discussion paper in 2022, the process has included multiple rounds of public consultation, deliberations within the Legislative Council, and pilot testing through a sandbox program. The finalized framework is expected to be officially implemented in 2025. This gradual and meticulous legislative approach reflects the cautious yet forward-looking stance of Hong Kong regulators in addressing crypto assets. By integrating industry feedback and aligning with international standards, Hong Kong has crafted a robust regulatory system that is both globally compatible and tailored to local market realities.

This prudent legislative trajectory ensures that the forthcoming Stablecoin Ordinance and its accompanying guidelines will be more comprehensive and enforceable. For market participants, achieving compliance under this framework will offer greater legal certainty and long-term growth potential. At the same time, it raises the bar for service providers — requiring firms like SlowMist to closely monitor regulatory developments, deeply understand policy rationale, and continuously strengthen their technical and auditing capabilities. This enables them to provide stablecoin issuers with comprehensive, compliance-driven security support, contributing to the secure and steady growth of Hong Kong’s crypto asset ecosystem.

Below are the key milestones in Hong Kong’s stablecoin regulatory journey:

Key Highlights of Hong Kong’s Stablecoin Regulatory Framework

Following the passage of the Stablecoins Bill, the Hong Kong Monetary Authority (HKMA) released the Draft Guideline on Supervision of Licensed Stablecoin Issuers on May 26, 2025. The draft is intended to ensure the stability, security, and orderly operation of Hong Kong’s stablecoin ecosystem. It outlines the ongoing compliance obligations for licensed issuers, covering key areas of operations and governance, including:

• Reserve asset management
• Issuance, redemption, and distribution
• Business activities
• Financial resources
• Risk management
• Corporate governance
• Business conduct and practices

Notably, the “Risk Management” section accounts for more than half of the entire draft document — underscoring the HKMA’s strong emphasis on ensuring that stablecoin issuers are equipped with robust risk control capabilities.

In response to the multi-year regulatory process — from the 2022 release of the discussion paper to the formal implementation in 2025 — the SlowMist security team conducted a systematic analysis. Together with ecosystem partners, SlowMist has developed a comprehensive solution:
“Stablecoin Risk Management and AML/CFT Compliance Security Framework” to help issuers meet the increasingly high standards of regulatory compliance and risk mitigation.

Note

This framework aims to analyze selected core compliance requirements outlined in the Draft Guideline on Supervision of Licensed Stablecoin Issuers, and to recommend corresponding technical solutions and implementation pathways based on SlowMist’s practical experience in blockchain security, compliance auditing, and risk management. However, the Draft Guideline encompasses a wide and complex set of regulatory obligations, spanning technical, operational, governance, and AML/CFT dimensions. This proposal focuses only on key provisions and does not attempt to fully address all aspects of the draft requirements.

In addition, the compliance system of a stablecoin issuer must be continuously refined based on its business model, technical architecture, and regulatory developments. The recommendations in this document are based on current technological capabilities and industry practices, and may require further adjustment in light of actual business needs, technological evolution, and updates to regulatory expectations. Issuers are strongly encouraged to engage in ongoing consultation with professional compliance and security service providers (such as SlowMist) and to closely follow the latest guidance from relevant regulatory bodies to ensure the completeness and effectiveness of their compliance programs.

Conclusion

As Hong Kong’s crypto asset regulatory environment continues to mature, stablecoin issuers are entering a new stage marked by both opportunities and challenges. Drawing on its blockchain security expertise developed since 2018, SlowMist has become a key player and trusted partner in Hong Kong’s compliance and security auditing space for stablecoin issuers.

SlowMist offers end-to-end security solutions, covering both on-chain and off-chain components — including smart contract audits, infrastructure protection, key management, and data security. Through proprietary tools such as MistTrack and its AML system, SlowMist helps issuers build AML/CFT frameworks aligned with HKMA standards to mitigate illicit fund risks. In line with Hong Kong’s emphasis on “continuous risk management,” SlowMist provides 24/7 security monitoring and threat intelligence via MistEye, enabling a shift from reactive defense to proactive risk mitigation.

SlowMist’s successful collaborations with Hong Kong’s first batch of licensed virtual asset service providers further demonstrate its ability to deliver world-class technical strength, comprehensive service coverage, deep industry experience, and an in-depth understanding of the local regulatory landscape. As a foundational pillar of crypto asset security, SlowMist remains committed to supporting the healthy development of Hong Kong’s stablecoin market and helping to solidify Hong Kong’s position as a global Web3 financial hub.

Acknowledgments

SlowMist would like to extend its sincere thanks to InvestHK, HashKey, RD Technologies, Amber Group, RigSec, and Akamai for their long-standing trust and support.

It is through the continued commitment of these partners to the development of a secure and compliant blockchain ecosystem that the “Stablecoin Risk Management and AML/CFT Compliance Security Framework” has been continuously refined — offering the industry a clear compliance roadmap and strong technical foundation.

References

[1] Stablecoin Ordinance (Hong Kong)
https://www.legco.gov.hk/yr2025/chinese/ord/2025ord017-c.pdf

[2] Draft Guideline on Supervision of Licensed Stablecoin Issuers (HKMA)
https://www.hkma.gov.hk/media/eng/regulatory-resources/consultations/20250526_Consultation_on_Draft_Guideline_on_Supervision_of_Licensed_Stablecoin_Issuers.pdf

[3] Consultation Paper on the Proposed AML/CFT Requirements for Regulated Stablecoin Activities (HKMA)
https://www.hkma.gov.hk/media/eng/regulatory-resources/consultations/20250526_Consultation_Paper_on_the_Proposed_AMLCFT_Req_for_Regulated_Stablecoin_Activities.pdf

About SlowMist

SlowMist is a blockchain security firm established in January 2018. The firm was started by a team with over ten years of network security experience to become a global force. Our goal is to make the blockchain ecosystem as secure as possible for everyone. We are now a renowned international blockchain security firm that has worked on various well-known projects such as HashKey Exchange, OSL, MEEX, BGE, BTCBOX, Bitget, BHEX.SG, OKX, Binance, HTX, Amber Group, Crypto.com, etc.

SlowMist offers a variety of services that include but are not limited to security audits, threat information, defense deployment, security consultants, and other security-related services. We also offer AML (Anti-money laundering) software, MistEye (Security Monitoring) , SlowMist Hacked (Crypto hack archives), FireWall.x (Smart contract firewall) and other SaaS products. We have partnerships with domestic and international firms such as Akamai, BitDefender, RC², TianJi Partners, IPIP, etc. Our extensive work in cryptocurrency crime investigations has been cited by international organizations and government bodies, including the United Nations Security Council and the United Nations Office on Drugs and Crime.

By delivering a comprehensive security solution customized to individual projects, we can identify risks and prevent them from occurring. Our team was able to find and publish several high-risk blockchain security flaws. By doing so, we could spread awareness and raise the security standards in the blockchain ecosystem.