Hong Kong's SFC to Inspect Crypto Trading Platforms Pending Licenses
Summary:
The Hong Kong Securities and Futures Commission (SFC) plans to inspect and scrutinize local digital asset trading platforms that are still under regulatory approval following the June 1, 2021 licensing deadline. The SFC emphasizes the importance of platforms being licensed to protect client assets and ensure Know Your Customer (KYC) processes are in place. Additionally, there was a decrease in the number of companies applying for operational licenses, with only two firms, OSL Digital Securities Limited and Hash Blockchain Limited, securing a license to operate in Hong Kong.
The Securities and Futures Commission (SFC) in Hong Kong plans to carry out on-the-spot checks on regional digital asset trading platforms (VATPs) still undergoing regulatory endorsement following a June 1 cut-off date for licensing. The SFC stressed to crypto organizations on May 28 the necessity for the companies to secure a license before June. Post deadline, all domestic crypto trading platforms need to be either licensed or deemed viable for licensing by the SFC. The latter category applies to a temporary system crafted for crypto enterprises already operational in the area before the licensing scheme was implemented. Post June 1, running an unlicensed VATP in Hong Kong is considered punishable by law and the SFC will be following up with firms. The SFC will carry out spot checks in forthcoming months on the applicants to confirm their compliance with SFC regulations. The regulator stated that it will be particularly interested in how companies are protecting client assets and executing Know Your Customer (KYC) procedures. The SFC urged investors to only engage in crypto trade on SFC approved platforms. It cautioned companies trying to procure licenses to not actively promote services or attract new retail clients until formally licensed and to prevent access to their services by mainland Chinese inhabitants. During this month, there was a steady decrease in the number of crypto exchanges seeking operational licenses in Hong Kong. A total of 11 crypto companies, including OKX and Huobi's local branch, vacated their applications prior to the cut-off, leaving 18 applications still awaiting approval. Crypto exchange Gate.HK ceased all activities related to obtaining new users, stopped existing users from depositing, and started eradicating tokens on May 23. The exchange intends to revive services after revamping its platform to abide by Hong Kong's regulatory stipulations. Only two firms, OSL Digital Securities Limited and Hash Blockchain Limited, have been granted a license to operate in Hong Kong, as reported by the SFC.
Published At
5/29/2024 8:57:49 AM
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