Hong Kong Securities and Futures Fee (SFC) is about to examine the workplaces of cryptocurrency buying and selling platforms looking for to function within the space as licensed digital asset buying and selling platforms (VATPs).
In a Could 28 announcement, the fee reminded that the “non-contravention period” for VATPs working in Hong Kong is coming to an finish on June 1.
Based on the regulator, these platforms which are “deemed-to-be-licensed” must bear an onsite inspection.
“The SFC will conduct on-site inspections to ascertain their compliance with the SFC’s regulatory requirements, with a particular focus on their safeguarding of client assets and know-your-client processes,” the announcement stated.
Any of the candidates present in violation of the required compliance measures would see their licenses denied. They’d even be topic to different regulatory actions as deemed essential by the SFC.
To this point, 18 entities are at the moment labeled as “deemed-to-be-licensed,” a short lived measure put in place till the licensing course of is accomplished. After the June 1 deadline, any unlicensed platform providing their companies can be immediately breaching the anti-money laundering and counter-terrorism legal guidelines.
Additional, the SFC has pressured that deemed-to-be-licensed VATP candidates will not be formally licensed and, therefore, can not have interaction in advertising their companies or onboarding retail customers.
Furthermore, if the SFC rejects the appliance of a VATP, it must “submit a plan” for the orderly winding down of its enterprise in Hong Kong, with a deal with defending consumer pursuits.
On the time of publication, solely two entities, particularly OSL Digital Securities Restricted and Hash Blockchain Restricted, are listed as totally licensed VATPs.
Some candidates have already withdrawn their functions after failing to satisfy the Hong Kong authority’s necessities. The most recent on this regard was the Hong Kong arm of crypto change Gate.io, which withdrew its software on Could 22.
Crypto change OKX additionally took an identical route and halted its companies in Hong Kong after asserting its license software withdrawal on Could 24.
The licensing necessities come as Hong Kong is witnessing an uptick in cryptocurrency-related scams. In March, the SFC warned of platforms impersonating the area’s two licensed platforms, OSL Digitial and Hash Blockchain Restricted.
