Hong Kong’s Securities and Futures Commission (SFC) has issued a clear mandate to all virtual asset trading platforms (VATPs) operating within its jurisdiction. As of February 29, all crypto exchanges in Hong Kong must either obtain or apply for a VATP license.
The SFC’s directive is a significant step in establishing a regulated and safe environment for virtual asset investors.
Hong Kong Crypto Exchanges Running Out of Time
The commission emphasized the importance of trading through licensed exchanges, urging investors to regularly check the regulatory status of their platforms. The SFC stated:
“Investors should check whether a VATP is on the ‘List of licensed virtual asset trading platforms’ or the ‘List of virtual asset trading platform applicants.’”
This list differentiates between fully licensed VATPs and those whose applications are pending. This highlights the ongoing efforts to bring clarity and security to the digital asset space in Hong Kong.
Further underscoring the seriousness of these regulations, the SFC warned that trading on unlicensed platforms could pose significant risks, as approval for pending applications is not guaranteed.
Investors currently using unlicensed platforms are advised to transfer their holdings to a licensed entity by May 31. Failing to do so will result in the potential closure of their accounts.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Two Pack Leaders Emerge
In tandem with these regulatory developments, OSL, one of the two SFC-approved exchanges, has reaffirmed its commitment to high-security standards despite the SFC’s recent decision to lower mandatory insurance coverage on digital assets to 50%.
The exchange asserted its stance, reflecting a keen awareness of the volatile nature of the cryptocurrency market
“OSL is steadfast in its commitment to safeguarding at least 95% of regulated assets under custody.”
Meanwhile, HashKey, another SFC-approved exchange, has achieved a significant milestone, attaining unicorn status with a valuation exceeding $1.2 billion. This achievement marks a notable success story within Hong Kong’s tightly regulated crypto exchange sector.
The company’s rapid growth and high valuation reflect the changing nature of the crypto market in Hong Kong, even amid more stringent regulatory oversight.
Hong Kong is positioning itself as a hub for digital asset trading. These latest developments signify a balanced approach between fostering innovation and ensuring robust investor protection.
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Source: https://beincrypto.com/hong-kong-crypto-exchanges-comply-shut-down/