Today, the Hong Kong Securities and Futures Commission (SFC) issued a warning about unlicensed cryptocurrency exchanges undertaking “improper practices.” The regulator emphasized that operating without a license in the cryptocurrency trading industry is a “criminal offense” in Hong Kong.
The SFC added that some unlicensed cryptocurrency trading platforms make misleading claims that they have sent the commission license applications when in fact they have not. The warning emphasizes that applicants who break pertinent legislation may not be granted a license under this new framework as the SFC implements a new regime for regulating crypto retail trade.
The SFC’s action is a part of continuous efforts by Hong Kong authorities to oversee the cryptocurrency market, ensuring that all participants adhere to the law, and safeguard investors and the stability of the financial system.
“VATPs which considers themselves eligible for deeming the transitional arrangements are reminded that the SFC may decide that deeming is inapplicable if it does not see a reasonable prospect for the VATPs to successfully show that they are capable of complying with the applicable legal and regulatory requirements,” the SFC said.
The action was also taken shortly after Hong Kong’s regulator unveiled plans to allow licensed cryptocurrency platforms to serve retail investors as part of the sector’s new regulatory framework.
The proposed regulations include a range of topics, including, the segregation of client funds, cybersecurity standards, and requirements for safe asset storage. This was put into effect on June 1 in conjunction with the introduction of a new licensing scheme for platforms that use virtual assets.
The SFC may decide that deeming is inapplicable if it does not see a reasonable prospect for the VATPs to successfully demonstrate that they are capable of complying with the applicable legal and regulatory requirements, the SFC reminds VATPs who believe themselves to be eligible for deeming under the transitional arrangements.
Earlier in April, cryptocurrency exchange OKX reported that after a month of beginning operations in Hong Kong, it had received over 10,000 new user registrations.
The fact that OKX is the first exchange in Hong Kong to achieve this milestone following the launch of the new virtual asset service providers (VASPs) system in the city on June 1, 2023, makes this unprecedented influx all the more impressive.
- Published By Team Hongkong Journalist