{"id":547089,"date":"2026-07-10T17:30:05","date_gmt":"2026-07-10T16:30:05","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=547089"},"modified":"2026-07-11T11:00:15","modified_gmt":"2026-07-11T10:00:15","slug":"hong-kong-gives-crypto-platforms-one-year-to-ditch-one-time-passwords-or-cover-user-losses","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/hong-kong-gives-crypto-platforms-one-year-to-ditch-one-time-passwords-or-cover-user-losses\/","title":{"rendered":"Hong Kong gives crypto platforms one year to ditch one-time passwords or cover user losses"},"content":{"rendered":"<p>Hong Kong crypto platforms have until July 8, 2027, to ditch one-time passwords for client logins and device registration under new security rules.<\/p>\n<p>By then, licensed virtual asset service providers and internet brokers must use authentication that can resist phishing for client logins and the registration or binding of devices, according to a <a href=\"https:\/\/apps.sfc.hk\/edistributionWeb\/gateway\/EN\/circular\/doc?refNo=26EC35\">July 9 circular<\/a>.<\/p>\n<p>The regulator said one-time passwords, or OTPs, do not meet that standard and should not be used for those two processes.<\/p>\n<p>The rule applies only when clients log in or link a new device, leaving other OTP uses unchanged.<\/p>\n<p>Firms do not have to make existing clients rebind devices that are already linked. Large internet brokers are expected to deploy the stronger methods immediately, while the broader group has a 12-month implementation period.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/hong-kong-approves-4-new-crypto-trading-platform-licenses-in-regulatory-push\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">Hong Kong approves 4 new crypto trading platform licenses in regulatory push<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n<p>Controls around those logins take effect from the outset. Firms must review and improve client notifications, account monitoring, surveillance and incident-response procedures now.<\/p>\n<p>The SFC requires firms to suspend or restrict an account as soon as they spot signs of fraud.<\/p>\n<h2>A deadline with liability attached<\/h2>\n<p><a href=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-547095\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline.png\" alt=\"Timeline showing Hong Kong SFC requirements from July 9, 2026 to July 8, 2027, including immediate monitoring duties, passkeys, bound devices and senior management accountability.\" width=\"720\" height=\"1440\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline.png 887w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline-150x300.png 150w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline-512x1024.png 512w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/07\/ig_hong_kong_otp_timeline-768x1536.png 768w\" sizes=\"(max-width: 720px) 100vw, 720px\" \/><\/a><\/p>\n<p>The order follows phishing campaigns reported in 2025. Fraudsters sent text messages containing links that impersonated brokers and purported to be requests from regulators or government bodies.<\/p>\n<p>Clients handed over login credentials and one-time passcodes on fake sites, giving attackers a path to hijack sessions and move funds.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/fcc-robocall-rule-crypto-risk\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">FCC robocall rule could make phone accounts a richer target for crypto attackers<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n<p>The SFC wants firms to monitor irregular logins, new-device activity, trading that deviates from a client\u2019s history, and fund or virtual-asset withdrawals.<\/p>\n<p>Clients should receive prompt notices of successful logins and higher-risk changes, including new devices and the creation or revocation of passkeys.<\/p>\n<p><a href=\"https:\/\/fidoalliance.org\/passkeys-2\/\">Passkeys<\/a> use public-key cryptography in place of a reusable secret that a client can type into a fake site.<\/p>\n<p>The credential is designed to work only with the legitimate service, while the private key remains on the user\u2019s device or with a passkey manager.<\/p>\n<p>The SFC also accepts device binding built around robust verification, with an additional factor such as a biometric check or an account password.<\/p>\n<p>The regulator tied those safeguards to firms\u2019 duty to shield clients from theft and fraud.<\/p>\n<p>It said a firm can be held accountable for client losses when inadequate measures fail to prevent, detect and stop large-scale unauthorized transactions after a hacking incident.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/36-million-upbit-hack-revives-the-quiet-truth-about-hot-wallet-insurance\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">The trick big crypto exchanges are using to mitigate hacks, yet can still lock up your money<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n<p>Senior managers overseeing overall operations and information technology are ultimately responsible for the rollout.<\/p>\n<p>The real test comes by July 2027, when platforms must drop OTP at key login points while improving fraud detection enough to protect clients through the change.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SFC wants phishing-resistant login and device binding by July 8, 2027, while monitoring and response duties apply immediately.<\/p>\n","protected":false},"author":1264,"featured_media":547328,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39,77968,79915],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hong Kong gives crypto platforms one year to ditch one-time passwords or cover user losses<\/title>\n<meta name=\"description\" content=\"Hong Kong crypto platforms have one year to replace one-time passwords as new SFC cybersecurity rules take effect.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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