Hong Kong’s Securities and Futures Commission (SFC) has released its consultation paper on proposed regulatory requirements for Virtual Asset Service Providers (VASPs) before the new licensing regime takes effect on June 2023.
Under the new licensing regime, all centralised virtual asset trading platforms carrying on business in Hong Kong or actively marketing to Hong Kong investors will need to be licensed by the SFC.
As part of the consultation, the SFC is seeking views particularly on whether to allow licensed platform operators to serve retail investors, and if so, the measures to be implemented in addition to the proposed range of robust investor protection measures.
The SFC called on VASPs that plan to apply for a license, including pre-existing platforms, to begin to review and revise their systems and controls to prepare for the new regime.
Meanwhile, those who do not plan to apply for a license should start preparing to shut down their operations in Hong Kong.
The commission added that it intends to publish lists on its website to inform the public of the different regulatory statuses of VA trading platforms, and will continue working with the Investor and Financial Education Council to enhance investor education for the Hong Kong public.
Interested parties are invited to submit their comments to the SFC on or before 31 March 2023.
“As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle.
In light of the recent turmoil and the collapse of some leading crypto trading platforms around the world, there is clear consensus among regulators globally for regulation in the virtual asset space to ensure investors are adequately protected and key risks are effectively managed.”
said Julia Leung, the SFC’s Chief Executive Officer.