Navigating the Evolution of Cryptocurrency Regulations in Hong Kong
Under the New Licensing Regime, which exchanges have the possibility of obtaining the license to provide compliant cryptocurrency trading services in Hong Kong first? It is necessary for us to clarify the policy development of Hong Kong's regulation of cryptocurrency assets.
Recently, there has been a growing expectation of relaxed cryptocurrency policies in Hong Kong, as a "mysterious Eastern power" has been hyping up concepts such as L2, LSD, and AI, causing a new round of speculation on the market. On February 20th, after the Hong Kong Securities and Futures Commission (SFC) issued a consultation paper on regulating virtual asset trading platforms, the industry responded positively. Several exchanges, including Huobi Global, OKX, and Bitget, expressed their eagerness to apply for a Hong Kong cryptocurrency trading license.
On February 22nd, Hong Kong's cryptocurrency industry received a boost when the Financial Secretary of the Hong Kong SAR government, Paul Chan Mo-po, announced HKD 50 million funding to accelerate the development of the Web3 ecosystem. Additionally, the government plans to establish a dedicated working group on virtual asset development to provide recommendations on the sustainable and responsible growth of the industry for government.
On the 23rd, WEEX announced on its official Twitter that the platform has been closely following the regulatory framework of Hong Kong's cryptocurrency policies since October last year. The compliance department has fully studied the consultation paper of SFC's proposed regulation on virtual asset trading platforms and has started preparing for the application of relevant cryptocurrency licenses. This will allow WEEX to provide compliant cryptocurrency trading and custody services in the region and accelerate its compliance process in Hong Kong. Previously, WEEX obtained licenses from the US MSB, Canadian MSB, and SVGFSA.
According to the latest requirements of the SFC, starting from June 1, 2023, without a valid license, any centralized virtual asset trading platform (centralized exchange) that operates business in Hong Kong or actively promotes its services to Hong Kong investors , will be deemed to have violated the licensing regulations of the virtual asset service providers under the "Anti-Money Laundering Ordinance", unless they meet the requirements for participating in the transitional arrangement (the transitional period is planned to be 12 months).
Although speculative fever has cooled recently with the market adjustment, as the testing ground for cryptocurrency development in China, the regulatory policy recovery in Hong Kong will undoubtedly bring long-term confidence support to the industry. We also look forward to Huobi Global, OKX, Bitget, WEEX and other exchanges obtaining licenses soon, and together contributing to the development of Hong Kong's blockchain and Web3.
[To be Continued...]
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