• Hong Kong’s SFC has issued a round on the brand new licensing system for VATP.
• VATP should acquire a license beneath the SFC to proceed working in Hong Kong.
• As per the round, license purposes have to be submitted by February 29, 2024.

The Hong Kong Securities and Futures Fee (SFC) issued a round on Might 31 asserting transition preparations for a brand new licensing system for centralized cryptocurrency buying and selling platforms. A brand new licensing regime beneath the Cash Laundering and Counterterrorism Financing Ordinance (Cap 615) (AMLO) will come into impact at present, based on the report.

The SFC has declared that beneath the brand new guidelines, any digital asset buying and selling platform (VATP) providing companies in Hong Kong should acquire a license from the fee. It added that the discover solely applies to platforms that provide companies utilizing non-security tokens.

The round states that VATPs working within the metropolis earlier than 1 June 2023 are topic to a transitional association and should apply for a license via the SFC’s utility discussion board WINGS by 29 February 2024. emphasised. In distinction, VATPs that didn’t exist earlier than June 1st usually are not topic to transitional measures.

Because the fee argues, platforms that don’t intend to use for a license will probably be compelled to close down their companies and stop advertising actions in Hong Kong. It additionally mentioned that present VATPs might “proceed to supply VA companies in Hong Kong from 1 June 2023 to 31 Might 2024 with out violating licensing necessities beneath AMLO by non-violating association.” declared.

The fee additionally argued that “there is no such thing as a transitional association for compliance with the Securities and Futures Ordinance (SFO),” including:

Any VATP that intends to supply safety token buying and selling companies should adjust to the Hong Kong Securities Regulation and begin enterprise providing safety token buying and selling solely upon acquiring the related license beneath the SFO.

The round is meant to provide platforms enough time to acquire licenses and proceed companies in Hong Kong, however the SFC strongly opposes any delay in submitting purposes past February 2024. are doing. The Fee will reject purposes submitted after the deadline.

The SFC has promoted regulation of cryptocurrency buying and selling with the purpose of creating a regulatory compliant business. The Fee’s proposal for a licensing system was put ahead earlier and was supported by many, however some referred to as for additional clarification.