Hong Kong’s Securities and Futures Commission (SFC) has announced that regulated platforms will soon be able to serve ordinary investors on the island. In a statement released on May 23, 2023, the SFC encouraged owners of virtual asset trading platforms to apply for a license if they are willing to comply with the proposed rules.
According to the proposed rules, the criteria for these platforms will cover various aspects, including safety requirements for asset custody, segregation of client assets, and cybersecurity measures.
Julia Leung, the CEO of the SFC, stated that establishing clear regulatory requirements is vital for creating an environment that fosters responsible and innovative development. Leung highlighted that Hong Kong’s comprehensive regulatory framework for virtual assets follows the principle of “same business, same risks, same rules,” and its goal is to provide robust investor protection and effectively manage significant risks.
While the rules are set to take effect in June 2023, no virtual asset trading platforms targeting retail investors have received clearance from the Hong Kong Regulator. During the consultation period, the SFC received 152 written submissions from the industry.
Currently, the SFC lacks regulatory oversight over the majority of publicly accessible trading platforms for virtual assets. The statement addressed this issue and stated that those unwilling to comply with the upcoming rules should make arrangements for an orderly closure of their business operations in Hong Kong.
Meanwhile, Eddie Yue, the Chief Executive Officer of the Monetary Authority of Hong Kong, has stressed the importance of adhering to strict laws for Bitcoin and crypto businesses while expressing the city’s openness towards them.
During a speech at the Bloomberg Wealth Asia Summit on May 9, 2023, Yue stated that the Hong Kong government’s new regulatory framework would ensure the resilience and integrity of the nation’s financial system. He also stressed the government’s vigilance in monitoring any potential risks associated with the cryptocurrency sector.
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