Hong Kong’s
Securities and Futures Commission (SFC) announced on Monday the launch of public
consultation regarding regulating trading platforms for cryptocurrencies and
digital assets. Interested parties can submit their comments until 31 March
2023.
Hong Kong Opens Crypto
Regulation Consultation Period
Starting
from 1 June 2023, any centralized virtual asset trading platform that conducts business
in Hong Kong or targets Hong Kong investors must obtain a license from the SFC
under a new licensing system. The SFC’s proposed regulatory standards for
virtual asset trading platforms are modeled after the current Securities and
Futures Ordinance regulations and are similar to those for licensed securities
brokers and automated trading venues. Additionally, the SFC has suggested
revisions to some of the existing requirements as part of this initiative.
The first information
suggesting that Hong Kong wants to legalize crypto trading and broaden its
status as a prominent financial hub to a digital assets center emerged in
October 2022. Although cryptocurrency trading is banned in China, Hong Kong is
taking advantage of its independent status to allow brokers and platforms to
apply for local licenses.
During the
consultation period, SFC specifically requests input on whether licensed
platform operators should serve retail traders and what additional measures
should be met to protect individual investors.
