Hong Kong’s SFC Releases Round on VATPs’ New Licensing System

• Hong Kong’s SFC launched a round on a brand new licensing system for VATPs.
• The VATPs are required to get licensed below the SFC for persevering with their operations in Hong Kong.
• Functions for the license ought to be submitted earlier than February 29, 2024, as per the round.

Hong Kong’s Securities and Futures Fee (SFC) launched a round on Could 31 asserting the transitional preparations for a brand new licensing system for centralized crypto buying and selling platforms. As per the report, the novel licensing regime below the Anti-Cash Laundering and Counter-Terrorist Financing Ordinance (Cap 615) (AMLO), is in power from right this moment.

The SFC has declared that below the brand new rule, the digital belongings buying and selling platforms (VATPs) offering companies in Hong Kong can be required to be licensed by the fee. It added that the round would apply solely to the platforms that present companies with non-security tokens.

The round highlighted that the VATPs which have been functioning within the metropolis earlier than June 1, 2023, are eligible for the transitional preparations and are required to use for a license earlier than 29 February 2024, through SFC’s software discussion board WINGS. In distinction, the VATPs which weren’t in existence earlier than June 1 will not be eligible for the transitional preparations.

As asserted by the fee, the platforms that don’t intend to use for the license can be pressured to close down their companies, ceasing their advertising and marketing actions in Hong Kong. It was additionally proclaimed that the already current VATPs may “proceed to supply the VA service in Hong Kong from 1 June 2023 to 31 Could 2024 with out being in breach of the licensing necessities below the AMLO by advantage of the non-contravention association.”

The fee additionally posited that there’s “no transitional association for compliance with the Securities and Futures Ordinance (SFO),” including:

VATPs which intend to supply buying and selling companies in safety tokens might be topic to the securities legal guidelines of Hong Kong and will begin their companies in offering buying and selling in safety tokens solely upon acquiring the related license below the SFO.

Although the round intends to supply ample time for the platforms to get licensed and proceed their companies in Hong Kong, SFC strongly objects to any delay within the submission of the appliance after February 2024. The fee confused that any software submitted after the due date can be rejected.

SFC has been selling rules on digital asset buying and selling in an try to determine the trade in compliance with the authority. The fee’s proposal for the licensing system has been put ahead earlier and was supported by many, although some requested for additional clarifications.