Approaching Deadline for Crypto Trading Platforms in Hong Kong
The Securities and Futures Commission (SFC) in Hong Kong has issued a reminder that crypto trading platforms must obtain a license to operate in the region before the grace period ends on June 1. The SFC has warned that operating without a license is considered a criminal offense, and they will enforce compliance accordingly. It is advised that investors only trade on SFC-licensed crypto trading platforms.
Regulatory Deadline Nears for Crypto Trading Platforms in Hong Kong
The Hong Kong Securities and Futures Commission (SFC) has issued a notice, reminding the public that the grace period for virtual asset trading platforms (VATPs) operating in Hong Kong under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) will come to an end on June 1.
The regulator has explained that all crypto trading platforms operating in Hong Kong must be licensed by the SFC or considered as "deemed-to-be-licensed VATP applicants." The SFC has warned that operating a VATP in Hong Kong without a license is a criminal offense, and they will take appropriate actions against any breaches of the law.
The SFC has noted that deemed-to-be-licensed VATP applicants are not officially licensed by the SFC. These applicants were operating in Hong Kong prior to the implementation of the new licensing regime and are enhancing their compliance measures. However, they must still demonstrate the actual implementation and effectiveness of these measures to the satisfaction of the SFC.
Deemed-to-be-licensed VATPs and their owners must fully comply with all SFC regulatory requirements. They should refrain from marketing their services or onboarding new clients until they receive formal licensing. Additionally, VATPs must ensure that their services are not accessible to Mainland Chinese residents and that related entities also comply with this restriction. The SFC has stated that they will conduct on-site inspections to ensure compliance, with a focus on client asset protection and know-your-client processes. Any observed non-compliance will result in the refusal of license applications and further regulatory actions.
Furthermore, the SFC has advised investors to only trade on VATPs that have been licensed by the commission. Investors are encouraged to regularly check the "List of licensed virtual asset trading platforms" on the SFC's website to verify the licensing status of the VATPs they use.
Several crypto exchanges, including Okx and Gate.hk, have announced that they will cease operations in Hong Kong due to the new regulatory framework coming into effect.
What are your thoughts on the regulatory framework for crypto in Hong Kong? Let us know in the comments section below.