Hong Kong's plan to tighten oversight of digital asset firms has raised concerns among industry players about potential operational disruptions. The Hong Kong Securities & Futures Professionals Association (HKSFPA) has warned that the proposed new licensing requirements could force compliant crypto managers to suspend operations if implemented without a transition period. The association is advocating for a six to twelve-month grace period to allow firms to continue operations while awaiting license approval. The HKSFPA's main concern is that a "hard start" would require all market participants to hold a valid license from day one, potentially leaving firms in limbo if their applications are still under review. This could impact businesses currently operating legally under existing rules but not yet licensed under the new system. The association also expressed concerns about the Crypto Asset Reporting Framework (CARF), cautioning that inflexible implementation could expose firms to operational and legal risks. The proposed regulations, still under consultation, aim to extend Hong Kong's regulatory reach across virtual asset dealing, advisory, and fund management services. While the industry supports stronger regulatory standards, there is a call for careful execution to avoid discouraging institutional involvement and hindering the adoption of compliant crypto infrastructure.