Under the Securities and Futures Commission’s licensing regime, which started June 1, crypto firms offering services or operating in Hong Kong must comply with new requirements.
The Securities and Futures Commission (SFC) of Hong Kong issued a notice about unlicensed virtual asset trading platforms “engaging in improper practices,” warning of potential criminal charges.
In an Aug. 7 notice, the SFC said certain trading firms had falsely claimed to have submitted applications for licenses in Hong Kong. The securities regulator said should the companies actually apply to operate legally in the special administrative region, it would consider any false statements as well as possible criminal charges.
Aug. 7 notice from Hong Kong’s Securities and Futures Commission. Source: Securities and Futures Commission via Facebook
According to the SFC, some unlicensed crypto trading platforms in Hong Kong set up new entities, claiming to have submitted applications to the securities regulator. However, “the services and products offered by some of these new entities may not be in compliance with the legal and regulatory requirements” under the SFC’s rules that became effective as of June 1.
“These established entities will also need to apply for SFC licences or they should proceed to close their business in Hong Kong,” said the financial watchdog. “Conducting unlicensed activities in Hong Kong is a criminal offence.”
Certain crypto firms, including HashKey and OSL, have received licenses under the SFC’s regime, allowing the platforms to offer a variety of crypto services to Hong Kong residents. The licensing regime requires crypto exchanges and service providers to ensure safe custody of assets as well as follow Know Your Customer, Anti-Money Laundering and Combatting the Financing of Terrorism rules, among others.