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>>Hong Kong's Securities and Futures Commission (SFC) will conduct on-site inspections of licensed crypto platforms following the recently passed licensing deadline.

Hong Kong's Securities and Futures Commission (SFC) will conduct on-site inspections of licensed crypto platforms following the recently passed licensing deadline.

crypthub

1/24/2025, 11:46:45 AM

Hong Kong's Regulatory Approach to Virtual Asset Trading Platforms

The Hong Kong Securities and Futures Commission (SFC) has announced its intention to enforce licensing regulations for virtual asset trading platforms (VATPs), emphasizing the June 1st deadline. This move aims to bring crypto trading in line with traditional financial markets, ensuring consumer protection and compliance.

Licensing Requirements and Deadlines

Effective June 1st, all local crypto exchanges in Hong Kong must obtain a license from the SFC or operate under a temporary framework for existing businesses. Failure to secure a license by this deadline will result in criminal offenses, with the SFC conducting on-site inspections to verify compliance.

Focus on Investor Safety and Compliance

The SFC's primary concern is client asset safeguarding and Know Your Customer (KYC) procedures. They advise investors to use only licensed platforms and provide clear instructions for license applicants, including a ban on promoting services to new retail clients until licensing is complete.

Withdrawing Applications and Pending Licenses

Prior to the deadline, several crypto firms, including OKX and Huobi's local entity, withdrew their applications. As a result, 18 applications remain pending approval. Some exchanges, like Gate.HK, have temporarily paused operations to ensure compliance with new regulations.

Early Licensees and New Developments

Only two companies, OSL Digital Securities Limited and Hash Blockchain Limited, have been granted licenses so far. Additionally, Hong Kong has entered the ETF market with Bitcoin and Ether funds, potentially increasing competition in the crypto space.