- Hong Kong’s Securities and Futures Commission (SFC) has issued a mandate to crypto exchanges in the region to submit a license application by February 29 or face a shutdown by May 31.
Hong Kong’s Securities and Futures Commission (SFC) issued a directive to all crypto trading platforms operating within its jurisdiction earlier today.
The directive mandates these platforms to submit a license application by February 29 or face a shutdown by May 31.
This announcement is part of Hong Kong’s ongoing efforts to establish a regulated regional digital asset trading environment. It reflects a global trend towards greater oversight in the crypto industry.
Navigating The New Crypto Regulatory Landscape
As the deadline looms, the SFC has ensured that investors are well-informed and prepared.
In an announcement posted in the early hours of Monday, the commission advised investors to ensure that they engage only with platforms listed as licensed virtual asset trading platforms or as applicants for the license.
Additionally, the commission has recommended that investors trading on unlisted platforms take early action, such as closing their accounts, to avoid potential disruptions.
The SFC noted in the announcement:
For investors dealing with virtual asset trading platforms (VATPs) operating in Hong Kong which are NOT on the “List of licensed virtual asset trading platforms” or on the “List of virtual asset trading platform applicants” (…), they are urged to make preparations early, before 31 May 2024, such as by closing their accounts with these VATPs or transferring to SFC-licensed VATPs for trading virtual assets.
Only two platforms, HashKey and OSL, have been granted licenses by the Hong Kong regulator. Meanwhile, Hong Kong’s SFC processes license applications from 14 crypto entities.
This list features prominent industry players such as Bybit and OKX and crypto exchange HKVAEX, which reportedly has connections with Binance.
Hong Kong’s Broader Regulatory Strategy
This stringent licensing process appears to be part of Hong Kong’s broader strategy to regulate the crypto market in its region.
Recently, the region announced plans to introduce a new regulatory framework targeting over-the-counter (OTC) crypto trading platforms.
Christopher Hui, Secretary for Financial Services and the Treasury, underscored the necessity of this regulation, particularly in light of several fraud cases involving unlicensed virtual asset trading platforms.
While regulations are tightening, Hong Kong remains committed to “fostering” a crypto-friendly environment, aspiring to become a leading digital asset hub in the Asia-Pacific region.
This balancing act is evident in the region’s recent move to open doors for filing spot exchange-traded funds (ETFs) applications.
Harvest Fund Hong Kong, a major Chinese fund company, has already applied for a Bitcoin spot ETF, marking a milestone in the region’s crypto journey.
Reports indicate that the SFC is contemplating accelerating the authorization process for spot ETF.
The aim is to have it listed on the Hong Kong Stock Exchange soon after the Chinese New Year celebrations, possibly as early as February 10.