AccordingtoHongKong’sSecuritiesandFuturesCommission(SFC),theregulatorisreadytoapprovemorelicensesforcryptoexchanges.However,itremindedthemthattheymustfirstundergostringentcompliancechecks.
TheSFCreleasedalicensingframework,whichallexchangesmustcomplywith.Thisframeworkaddresseskeyissues,suchasAMLpractices,investorprotection,andsecureassetscustody.
TheSFC’sdigitalassetlicensingframework
Afteraninspectionperiodofaboutfivemonths,thecommissionfoundsomeofthedigitalassetstradingcompaniesthatsubmittedtoitsapprovalprocesslackinginkeyareas,suchascustodyofclients’assetsandothersafetypractices.
Thisledtothreeexchanges:OSL,Hashkey,andHKVAX,gettingfullylicensed.11others,includingCrypto.com,gotatentativelicense,pendingwhenallissuesarefixed.
ThesenewlyissuedlicensesareexpectedtoimproveHongKong’sreputationasaninternationalcryptocurrencyhub.
Dr.EricYip,theExecutiveDirectorofIntermediariesattheSecuritiesandFuturesCommission,confirmedthatexchangesfoundthefeedbackusefulindevelopingtheirbusinesses.Healsosaidtheyarewillingtocommitresourcestorectifyissuesnotedduringtheaudit.Henotedthatscrutinyfromregulatorybodiesintothedigitalassetseconomywilldrivemarketparticipantstooperatewithinlegalboundaries,whichisanetpositivefortheadoptionofdigitalassets.
HongKongdigitalassets-friendlyregime
Sincetheywerefirstintroduced,cryptoregulationhasbeenadivisivesubject.Inthepast,HongKongwasnottoofriendlywithdigitalassetseither.Atthetime,itcitedtheirvolatilenature,concernsaboutinvestorprotection,andmoneylaundering.
AfterJPEX,anunlicensedcryptoexchangedefraudedover2,600peopleofabout$105million,theHongKonggovernmentsprungintoactiontoprotectitscitizens.Sincethen,theregionhasmadeastrongbidtobecomeaglobaldigitalassetshub.
TheSFChasgrowntobeoneoftheregulatorswithacomprehensivepolicyregardingtheregulationofdigitalassets.HongKongalsoestablisheditselfasapioneerbybeingthefirsttolaunchcryptoETFsinAsia,just3monthsafterthefinancialproductswerelaunchedintheU.S.
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