Hong Kong, May 16, 2025 — Hong Kong authorities have strengthened oversight of financial institutions, with a particular focus on compliance with international anti-money laundering (AML) and know-your-customer (KYC) standards. The extensive inspections have affected both traditional banks and brokers as well as participants in the crypto market and fintech sector.
CSC Futures (HK) Limited
One of the main subjects of the investigation is CSC Futures (HK) Limited. The Hong Kong Securities and Futures Commission (SFC) identified serious deficiencies in the company’s AML framework. As a result, former managing director Kao Chen Yung was banned from participating in the financial industry for six months. Regulators cited a lack of due diligence and weak risk controls, which may have exposed the company to money laundering and terrorist financing schemes.
DBS Bank (Hong Kong)
DBS Bank (Hong Kong), one of Asia’s largest banks, has also come under scrutiny. The Hong Kong Monetary Authority (HKMA) imposed a fine of USD 1.28 million due to systemic deficiencies in its AML procedures. The violations occurred between 2012 and 2019, when the bank failed to properly monitor high-risk clients and transactions. In addition, in July 2024, HKMA fined the bank’s branch HK$10 million for insufficient monitoring and poor documentation of customer transactions.
Crypto Wave Capital
Crypto Wave Capital, a company specializing in algorithmic cryptocurrency trading, has also been mentioned in the SFC investigation. Regulators have noted AML/KYC compliance issues in the company’s operations, though no official comments have been made by either SFC or the company itself.
Other Hong Kong Fintech Players Under Watch Include the Following Three Companies:
Airwallex
Regulatory Action: The HKMA initiated an audit of the digital payment platform’s AML/KYC procedures. The review identified a number of issues, including inadequate verification of fast transactions and a lack of timely monitoring for abnormal activity. The regulator has mandated the implementation of 24/7 transaction monitoring and an independent audit of the AML system, with a report due to HKMA by the end of 2025.
HashKey Group
Regulatory Action: The SFC conducted an on-site inspection of HashKey, a licensed virtual asset service provider. Inspectors found insufficient client segmentation and a lack of Enhanced Due Diligence (EDD) procedures for the “professional investors” category. The company was ordered to restructure its client classification system and implement automated EDD scenarios. It must update its internal AML policies by October 2025.
WeLab Bank
Regulatory Action: WeLab Bank, a digital bank licensed by the HKMA, was directed to revise its risk assessment methodology. The regulator identified weak points in the assessment of Politically Exposed Persons (PEPs) and in monitoring cross-border transfers. The HKMA has required AML stress tests and a revision of its methodology for identifying PEP clients, with a corrective plan to be submitted by mid-2025.
Financial Sector Under Pressure
Experts note that these measures aim to increase transparency and trust in Hong Kong’s financial system as it strives to maintain its status as a leading global financial hub. In 2025, regulators have intensified their influence in both the crypto and fintech sectors, particularly in light of the new stablecoin licensing regime and stringent requirements for virtual assets.
As oversight tightens, all major players—from digital banks to crypto platforms—are required to enhance their AML/KYC practices: implementing real-time monitoring, segmenting clients by risk, and regularly reporting to regulators.
Hong Kong Tightens Oversight of Fintech Sector: CSC Futures and DBS Bank Under Scrutiny was last modified: May 27th, 2025 by
