Hong Kong outlines upcoming crypto licensing regime


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Hong Kong’s Securities and Futures Fee (SFC) requires public suggestions on its newly proposed licensing regime for cryptocurrency exchanges set to take impact from June 2023.

A key consideration of the general public session window is whether or not to permit licensed exchanges to serve retail traders within the nation and what measures ought to be carried out to supply a variety of “sturdy investor safety measures.“

The SFC announced the session course of on Feb. 20, outlining a brand new licensing regime for the trade which proposes that every one centralized cryptocurrency buying and selling platforms working in Hong Kong should be licensed with the regulatory physique.

The SFC’s proposed regulatory pointers are primarily based on present necessities for licensed securities brokers and automatic buying and selling venues, whereas modifications have been made to a number of the present stipulations.

A press release from SFC CEO Julia Leung highlighted the “current turmoil” within the cryptocurrency ecosystem and the collapse of industry players like FTX as a main cause for clear regulatory pointers for the trade with investor safety high of thoughts:

“As has been our philosophy since 2018, our proposed necessities for digital asset buying and selling platforms embody sturdy measures to guard traders, following the ‘identical enterprise, identical dangers, identical guidelines’ precept.”

In accordance with the announcement, any individual or enterprise offering cryptocurrency-related providers should apply for a license from the SFC. Moreover, a lot of necessities are set out for cryptocurrency exchanges and repair suppliers.

This features a host of stipulations, together with the secure custody of belongings, Know Your Buyer, conflicts of curiosity, cybersecurity, accounting and auditing, danger administration, Anti-Cash Laundering/counter-financing of terrorism and prevention of market misconduct.

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

Companies that intend to proceed working and making use of for a license are inspired to overview and revise present programs and controls to fulfill the necessities of the upcoming regime. Exchanges and repair suppliers that don’t intend to use for a license must put together to shut down their companies in Hong Kong.

Hong Kong’s SFC additionally intends to publish and preserve a listing of licensed cryptocurrency exchanges and repair suppliers to tell most of the people of the registration statuses of various companies.

As beforehand reported by Cointelegraph, Hong Kong-based monetary service suppliers had begun to enquire about licensing necessities after an modification to the Anti-Cash Laundering and Counter-Terrorist Financing Ordinance in December 2022.