Hong Kong outlines upcoming crypto licensing regime

Hong Kong’s Securities and Futures Commission (SFC) calls for nationalist feedback connected its recently projected licensing authorities for cryptocurrency exchanges acceptable to instrumentality effect from June 2023.

A cardinal information of the nationalist consultation model is whether to let licensed exchanges to service retail investors successful the state and what measures should beryllium implemented to supply a scope of ‘robust capitalist extortion measures.’

The SFC announced the consultation process connected Feb. 20, outlining a caller licensing authorities for the manufacture which proposes that each centralized cryptocurrency trading platforms operating successful Hong Kong indispensable beryllium licensed with the regulatory body.

The SFC’s projected regulatory guidelines are based connected existing requirements for licensed securities brokers and automated trading venues, portion modifications person been made to immoderate of the existing prerequisites.

A connection from SFC CEO Julia Leung highlighted the ‘recent turmoil’ successful the cryptocurrency ecosystem and the collapse of manufacture players similar FTX arsenic a superior crushed for wide regulatory guidelines for the manufacture with capitalist extortion apical of mind:

“As has been our doctrine since 2018, our projected requirements for virtual plus trading platforms see robust measures to support investors, pursuing the ‘same business, aforesaid risks, aforesaid rules’ principle.”

According to the announcement, immoderate idiosyncratic oregon concern providing cryptocurrency-related services indispensable use for a licence from the SFC. Furthermore, a fig of requirements are acceptable retired for cryptocurrency exchanges and work providers.

This includes a big of prerequisites, including the harmless custody of assets, know-your-client, conflicts of interest, cybersecurity, accounting and auditing, hazard management, anti-money laundering/counter-financing of coercion and prevention of marketplace misconduct.

Related: Hong Kong watchdog aims to restrict retail traders to liquid products

Businesses that mean to proceed operating and applying for a licence are being encouraged to reappraisal and revise existing systems and controls to conscionable the requirements of the upcoming regime. Exchanges and work providers that bash not mean to use for a licence volition person to hole to adjacent down their businesses successful Hong Kong.

Hong Kong’s SFC besides intends to people and support a database of licensed cryptocurrency exchanges and work providers to pass the wide nationalist of the registration statuses of antithetic firms.

As antecedently reported by Cointelegraph, Hong Kong-based fiscal work providers had begun to enquire astir licensing requirements aft an amendment to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) successful December 2022.