The Hong Kong Securities and Futures Commission (SFC) has issued a reminder that crypto trading platforms must obtain a license to operate in Hong Kong before the grace period ends on June 1. The regulator warned that operating without a license is a criminal offense and will enforce compliance. Investors are advised to only trade on SFC-licensed crypto trading platforms.
Regulatory Deadline Approaches in Hong Kong for Crypto Trading Platforms
The Hong Kong Securities and Futures Commission (SFC) issued a notice on Tuesday reminding the public that the non-contravention period for virtual asset trading platforms (VATPs) operating in Hong Kong under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) will come to an end on June 1.
The regulator explained that all crypto trading platforms operating in Hong Kong must be either licensed by the SFC or “deemed-to-be-licensed VATP applicants,” warning:
It is a criminal offence to operate a VATP in Hong Kong in breach of the AMLO, and the SFC will take all appropriate actions against any breaches of the law.
The regulator noted that deemed-to-be-licensed VATP applicants are not formally licensed by the SFC. These applicants, operating in Hong Kong before the new licensing regime, are enhancing their compliance measures. However, “they still need to demonstrate the actual implementation and effectiveness of these measures to the SFC’s satisfaction,” the SFC clarified.
Deemed-to-be-licensed VATPs and their owners must fully comply with all SFC regulatory requirements and should not market their services or onboard new clients until they are formally licensed, the regulator explained, adding that VATPs must also ensure that their services are not accessible to Mainland Chinese residents and that related entities comply with this restriction. The SFC stated that it will conduct on-site inspections to ensure compliance, focusing on client asset protection and know-your-client processes. Any non-compliance observed will result in the refusal of license applications and further regulatory actions.
The SFC further advised investors to trade only on VATPs that it has licensed. They should regularly check the “List of licensed virtual asset trading platforms” on the SFC’s website to verify the licensing status of the VATPs they use.
Several crypto exchanges have announced that they are ceasing operations in Hong Kong due to the new regulatory framework going into effect, including Okx and Gate.hk.
Source: Bitcoin
