Hong Kong’s Securities and Futures Fee (SFC) requires public suggestions on its newly proposed licensing regime for cryptocurrency exchanges set to take impact from June 2023.
A key consideration of the general public session window is whether or not to permit licensed exchanges to serve retail buyers within the nation and what measures needs to be applied to supply a spread of “strong investor safety measures.“
The SFC introduced the session course of on Feb. 20, outlining a brand new licensing regime for the trade which proposes that every one centralized cryptocurrency buying and selling platforms working in Hong Kong have to be licensed with the regulatory physique.
The SFC’s proposed regulatory tips are based mostly on current necessities for licensed securities brokers and automatic buying and selling venues, whereas modifications have been made to among the current conditions.
A press release from SFC CEO Julia Leung highlighted the “current turmoil” within the cryptocurrency ecosystem and the collapse of trade gamers like FTX as a main motive for clear regulatory tips for the trade with investor safety prime of thoughts:
“As has been our philosophy since 2018, our proposed necessities for digital asset buying and selling platforms embrace strong measures to guard buyers, following the ‘identical enterprise, identical dangers, identical guidelines’ precept.”
In keeping with the announcement, any particular person or enterprise offering cryptocurrency-related providers should apply for a license from the SFC. Moreover, numerous necessities are set out for cryptocurrency exchanges and repair suppliers.
This features a host of conditions, together with the secure custody of property, Know Your Buyer, conflicts of curiosity, cybersecurity, accounting and auditing, danger administration, Anti-Cash Laundering/counter-financing of terrorism and prevention of market misconduct.
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Companies that intend to proceed working and making use of for a license are inspired to overview and revise current techniques and controls to satisfy the necessities of the upcoming regime. Exchanges and repair suppliers that don’t intend to use for a license should put together to shut down their companies in Hong Kong.
Hong Kong’s SFC additionally intends to publish and keep an inventory of licensed cryptocurrency exchanges and repair suppliers to tell most of the people of the registration statuses of various companies.
As beforehand reported by Cointelegraph, Hong Kong-based monetary service suppliers had begun to investigate about licensing necessities after an modification to the Anti-Cash Laundering and Counter-Terrorist Financing Ordinance in December 2022.