Hong Kong’s securities regulator is cracking down on unlicensed cryptocurrency exchanges, warning of potential criminal activity in the sector.
The Securities and Futures Commission has implemented a new licensing regime, requiring crypto firms operating or offering services in Hong Kong to comply with stringent regulations.
This move aims to protect investors and maintain the integrity of the financial market, as the cryptocurrency industry witnesses an exponential rise in popularity.
The SFC added that some unlicensed cryptocurrency trading platforms make misleading claims that they have sent the commission license applications when in fact they have not.
The warning emphasizes that applicants who breach pertinent regulations may not be approved for the position as the SFC implements a new framework for regulating crypto retail trading.
The SFC’s action is a part of continuous efforts by Hong Kong authorities to oversee the cryptocurrency market, ensure that all participants adhere to the law, and safeguard investors and the stability of the financial system.
The SFC reminded VATPs who believe they qualify for deeming under the temporary provisions that it
“may decide that deeming is inapplicable if it does not see a reasonable prospect for the VATPs to successfully show that they are capable of complying with the applicable legal and regulatory requirements.”
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The SFC has cleared two local firms to operate for retail investors but has not yet issued any licenses under its new virtual asset framework.