Hong Kong to Establish Crypto Exchange License Regulations in May

The Securities and Futures Commission (SFC) of Hong Kong is reportedly planning to establish licensing guidelines for crypto exchanges in May

The Securities and Futures Commission (SFC) of Hong Kong is reportedly planning to establish licensing guidelines for crypto exchanges in May.

In a report, SFC’s CEO, Julia Leung highlighted that over 150 comments were received during a consultation process for the regulatory framework that would apply to crypto exchanges in the region.

Notably, the incoming regulation is also intended to support exchange platforms that will be permitted to provide their services to retail investors in June. In an earlier report, the SFC advised all digital assets operators to start making arrangements for getting licenses or prepare for a peaceful closure of their business if they choose not to.

Crypto Exchanges Take Proactive Steps

While most prospective Virtual Asset Service Provider (VASP) licensees are still awaiting confirmation, several trading platforms such as HashKey Group have already started providing crypto-related services to investors under SFC’s permission.

Similarly, Hong Kong-based licensed crypto platform OSL also announced that it has become the first Type 1 SFC-licensed digital asset broker to distribute security tokens to professional investors in Hong Kong via a private security token offering.

Under SFC’s permission, the company will promote crypto trade between independent parties. Thus, allowing the trading of digital assets that are not normally listed on traditional crypto exchanges.

The Aim of the SFC License

By mandating exchange platforms to get SFC licenses, the regulator can guarantee that these platforms satisfy particular standards in terms of operations, risk management, and regulatory compliance. 

Therefore, limiting the risk of fraud, misconduct, and other destructive acts that could hurt investors or undermine market integrity.

Responsibilities of Hong Kong’s SFC

The SFC is an independent statutory body responsible for regulating the securities and futures market in Hong Kong. Its duties include licensing, market supervision, investor protection, international cooperation, and policy development.

Overall, the SFC’s fundamental objective is to support market development and investor protection while upholding the credibility and stability of Hong Kong’s securities and futures markets.

Hong Kong Prepares to Launch a Digital Asset Centre

A digital-asset center can be an important step for Hong Kong in developing its role as a financial hub. The development of a digital-asset center would likely involve the creation of infrastructure and regulatory frameworks to support the trading and transfer of digital assets. 

This could include the establishment of exchanges, custodial services, and other financial institutions that specialize in digital assets.