Hong Kong takes measures to get virtual asset operators licensed by SFC
The Securities & Futures Commission (SFC) takes inspiration from the Securities & Futures Ordinance with the difference that the SFC is dedicated to the operators of virtual assets. Hong Kong is now looking to strengthen its functions by ensuring that either the operators of virtual assets are licensed by the SFC, or they prepare for the closure of their businesses in the region.
Sounds like a firm step, but if recent events are to be considered in the global crypto market, then they are being taken with all the right intentions. The goal is to ensure that retail investors are serviced by operators and that their interests are protected at all costs. The new proposal goes into effect on June 01, 2023, and platforms that are interested in getting licensed by the SFC must submit the application before March 2023 ends, that is, maximum, by March 31, 2023.
Bringing the new proposal has also given the SFC an opportunity to propose modifications to requirements that have existed in the regime for some time. Not bad since times have changed, and the adoption of digital assets is gaining popularity across the globe. Web3 and blockchain technology are surely up for discussion, but the focus remains on the operators managing or, rather, offering virtual assets.
The SFC is currently seeking views to allow operators to serve retail investors. This is inclusive of onboarding clients and token admission.
Julia Leung, the Chief Executive Officer of the SFC, has said that the philosophy of the regulator has been to protect the investors under the tagline of the same business, same risks, and same rules. Julia also talked about the recent turmoil in the global crypto market without naming any particular venture. She said that the collapse of the leading crypto ventures has only made the case stronger to have a clear consensus among regulators across the globe to have practices in place to deal with investor protection and risk management.
Every best crypto trading bot platform will now necessarily have to apply for a license with the SFC if it wants to continue operating in Hong Kong. Moreover, platforms have been suggested to review and revise their systems before applying for a license with the SFC.
The statement remains intact, mentioning that platforms that do not wish to apply for a license must prepare to wrap up their operations in Hong Kong. March 31, 2023, is the deadline given by the SFC with firm statements in support of the platforms looking to get licensed and against the platforms that are not willing to apply for the license.
Operators of virtual asset trading platforms would rather prefer to have the license since the region has been warm enough to welcome the innovation. Working under the radar of the SFC will be the basic requirement in the future for operators. So, the best option appears to have all the requirements fulfilled for the protection of retail investors and their funds under every circumstance.
The SFC will soon publish the list of operators for verification, indicating every platform’s status in terms of being licensed.