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Hong Kong SFC to Inspect Crypto Firms’ Offices Post-License Deadline

May. 29, 2024. 2 min. read. Interactions

Post-June 1 licensing deadline, the Hong Kong SFC will audit local virtual asset trading platforms still completing their regulatory applications through on-site inspections.

Source: Racoonknits via DALL.E

The Hong Kong Securities and Futures Commission (SFC) will conduct on-site inspections of local virtual asset trading platforms (VATPs) that are still navigating their regulatory applications following the June 1 licensing deadline.

The SFC reminded crypto companies on May 28 of their obligation to obtain licenses by June. After this deadline, all local crypto trading platforms must be either licensed or “deemed-to-be-licensed” by the SFC. 

Applicants under the “deemed-to-be-licensed” status fall into a short-term framework for firms operating in the region before the new licensing regime was introduced. Operating an unlicensed VATP in Hong Kong after June 1 will be a criminal offense, and the SFC will enforce this rule with in-person checks.

“In the coming months, whilst the deemed-to-be-licensed VATP applicants pursue their applications, the SFC will conduct on-site inspections to ascertain their compliance with the SFC’s regulatory requirements,” stated the SFC. The commission emphasized a particular focus on safeguarding client assets and implementing Know Your Customer (KYC) processes.

The SFC also urged investors to trade only on SFC-licensed platforms. It warned companies seeking licenses not to “actively market services or onboard new retail clients until formally licensed” and to prevent mainland Chinese residents from accessing their services.

Earlier this month, the number of crypto exchanges seeking operational licenses in Hong Kong steadily decreased. A total of 11 crypto companies and exchanges, including OKX and Huobi’s local arm, withdrew their applications ahead of the deadline, with 18 applications still pending approval.

Crypto exchange Gate.HK ceased all activities related to acquiring new users and marketing, prevented existing users from making deposits, and began delisting tokens on May 23. It plans to relaunch services after reconstructing its platform to comply with Hong Kong’s regulatory requirements.

Only two companies, OSL Digital Securities Limited and Hash Blockchain Limited, have been granted licenses to operate in Hong Kong, according to the SFC.

SOURCE: Hong Kong SFC to compliance check crypto firms offices after license deadline

About the writer

Raccoonknits s

11.91671 MPXR

A writer at heart, fascinated by AI and its potential to shape our future. My journey started with a law degree, arming me with analytical skills enriching my narratives. Next to writing, I find joy in knitting and crocheting, where each loop and stitch is a meditation in creativity.

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