2023-5-24 15:59 |
Coinspeaker
Hong Kong to Permit Licensed Crypto Exchanges to Offer Services to Retail Investors
Hong Kong’s Securities and Futures Commission (SFC) has released the results of its consultation paper on regulating crypto assets in the country. In an announcement on May 23, 2023, the financial watchdog said it received 152 submissions from key players in the industry, professional associations, and consultancy firms, greenlighting its proposal to allow licensed crypto exchanges to serve retail investors in the nation.
The new development enables digital asset service providers (DASP) that demonstrate compliance with the new rulebook to apply for licenses from the appropriate authorities, while those who do not plan to follow the SFC’s proposed directives are required to close their business dealings in Hong Kong.
Hong Kong’s New Crypto Guidelines to Become Effective June 1Although the new guidelines are set to take effect starting June 1, 2023, the upcoming regulatory framework will encompass essential aspects, including asset custody safety requirements, avoidance of conflict of interest, customer asset segregation, and cyber security standards.
While the regulator is yet to approve any crypto trading platform to provide its business offerings to retail investors, crypto exchanges such as Huobi Global, OKX, and Gate.io have applied to obtain virtual assets service provider (VASP) licenses from the country.
If approved, the companies can tap Hong Kong’s crypto market to increase their user base and strengthen their footprints in the industry.
The decision by the SFC to allow authorized exchanges to operate in the country marks a significant step towards enhancing market integrity and building trust within the space. Through this move, Hong Kong has taken a step further towards achieving its goal of developing a virtual asset hub and becoming a center for technological innovations.
Protect Consumer InterestAside from allowing crypto trading platforms to operate in the country, the financial regulator is committed to providing stringent measures to safeguard investors while following the inputs from the results of the consultation paper released in February.
Some of the measures to be implemented in the rulebook include good governance practices, ensuring suitability during the onboarding process, conducting enhanced token due diligence, setting admission criteria, and promoting disclosures.
According to the SFC’s chief executive officer, Ms. Julia Leung, the upcoming guidelines for operators of digital asset trading platforms align with the same business and rule regulatory measures that aim to provide robust investor protection and manage risks.
“Providing clear regulatory expectations is key to fostering responsible development. Hong Kong’s comprehensive virtual asset regulatory framework follows the principles of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks,” Leung said.
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