Hong Kong Securities and Futures Commission: The private keys of the trustees/custodians of virtual asset funds must be securely stored locally in Hong Kong

ChainCatcher news, the Hong Kong Securities and Futures Commission pointed out in the "Circular on the SFC's Recognition of Fund Investment in Virtual Assets" that the trustee/custodian of virtual asset funds and any representatives responsible for holding the virtual assets of SFC-recognized virtual asset funds should ensure that the holdings of virtual assets are kept separate from their own assets and the assets held for other clients. They should also store the majority of virtual asset holdings in cold wallets, and minimize the amount and duration of virtual assets stored in hot wallets, unless necessary to meet subscription and redemption needs. Additionally, they must ensure that mnemonic phrases and private keys are securely stored locally in Hong Kong, strictly limit authorized personnel, adequately resist speculation (e.g., through non-deterministic generation) or collusion (through measures such as multi-signature and key sharding), and implement appropriate backups to reduce any single points of failure.