Hongkong seeks public feedback on the impending crypto licensing regime
To assist retail investors, Hong kong’s security and the future commission (SFC) has called for public opinion on their updated plan to allow licensed crypto exchanges.
The Hong Kong SFC is looking for public input on their latest proposition of licensing crypto trade for the safety of the investors. They have put forth the licensing requirements as well to attain the license. All of these measures are to ensure the investor’s protection.
The SFC left a narrow window while implementing the law for public consultation. This is to know whether the people endorse the government’s initiative and what more is possible to provide ‘robust investor protection measures’.
On 20th February, the SFC announced the consultation process. It highlights the latest licensing regime policy according to which all the digital assets (cryptocurrency) traders operating in hong kong must qualify for the license with the regulatory body.
The SFC also proposed new guidelines, mainly based on the prevailing requirements for licensed security brokers and automated trading venues. The CEO of SFC Julia Leung stated that the primary purpose of introducing clear regulatory guidelines was the investor’s protection at the top of mind because of the “recent turmoil” in the cryptocurrency world and the down rail of major business players like FTX.
“As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle.”
All crypto trade companies must comply with the new requirements to keep running their business, they won’t be able to keep going on with it while staying in Hongkong without following the licensing requirements because according to the updated crypto licensing regime, anyone be it a person or a company in the crypto market or providing any crypto services must possess a license. Moreover, there are certain requirements you must fulfill to get that.
There are various prerequisites that need to be fully met; including secure custody of the assets along with cyber security, auditing and accounting, conflicting agendas, risk management, Anti-Money Laundering, Counter-Terrorism Financing, and Market Misconduct Prevention.
As of December 2022, the Hongkong financial service providers have started to enquire about the licensing requirement after the amendment in the anti-money laundering and counter-terrorist financing ordinance.
The Hongkong’s SFC intends to keep and publish a list for the public awareness of all the licensed crypto traders and service providers.