According to CoinMeta, the Securities and Futures Commission of Hong Kong (SFC) and the Accounting and Financial Reporting Council (AFRC) have signed a new Memorandum of Understanding (MOU) to strengthen financial reporting and audit inspections of licensed crypto companies. The new agreement expands the financial reporting inspections for licensed virtual asset service providers, allowing regulatory authorities to share information, refer cases, and coordinate inspections and investigations. This new MOU directly replaces the one from 2021, incorporating licensed crypto companies into Hong Kong's regular financial inspection framework. Under the new regulations, crypto companies holding a SFC license must undergo audits by third parties to ensure the accuracy of their corporate balance sheets, reserve certifications, and customer asset custody records. Stricter rules may increase the compliance costs for smaller crypto companies, as they may require more robust accounting systems and additional audit support. At the same time, more stringent inspections may provide investors with more information regarding the financial conditions of licensed companies.