Hong Kong continues to take steps toward becoming a crypto hub.
Hong Kong’s Securities and Futures Commission (SFC), the independent statutory body regulating the securities and futures markets in Hong Kong, is seeking public comment on new rules for virtual asset trading platforms.
According to the press release shared on February 20th, SFC wants public feedback on whether to allow licensed virtual asset service providers to serve retail investors. On top of that, SFC wants to know public opinion about what measures should be taken to provide “a range of robust investor protection measures.”
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The consultation from Hong Kong’s SFC comes after the news broke that from June 1st, all cryptocurrency exchanges offering or advertising their services in Hong Kong will have to receive licensing from SFC.
In the press release, the securities and futures markets regulator highlighted that all firms that plan to operate in Hong Kong from June 1st should start reviewing and revising “their systems and controls to prepare for the new regime.”
On the other hand, the companies that plan to not comply with regulations should “start preparing for an orderly closure of their business in Hong Kong.”
Hong Kong’s SFC emphasized that all proposed rules are connected to the existing requirements for automated trading venues and licensed securities brokers. However, SFC noted that it made several modifications to meet the properties of virtual asset trading platforms.
The SFC’s Chief Executive Officer (CEO), Julia Leung, stated that after a recent crypto market turmoil and “the collapse of some leading crypto trading platforms,” it became noticeable that clear crypto regulatory guidelines are necessary. Leung added:
As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle.
Based on the press release, to receive SFC’s license, crypto exchanges will have to ensure safe custody of assets, cybersecurity, and risk management. On top of that, virtual asset service providers will have to comply with know-your-client, anti-money laundering, counter-financing of terrorism, and prevention of market misconduct requirements.
