Deadline Looms for Crypto Trading Platforms in Hong Kong
The Hong Kong Securities and Futures Commission (SFC) issued a timely reminder on Tuesday, stating that the grace period for virtual asset trading platforms (VATPs) operating in Hong Kong will end on June 1. The SFC emphasized that all crypto trading platforms in Hong Kong must obtain a license from the regulator or be considered “deemed-to-be-licensed VATP applicants.” The SFC warned that operating without a license is a criminal offense and will be met with strict enforcement.
The SFC clarified that deemed-to-be-licensed VATP applicants are not formally licensed by the SFC. These applicants, who started operating in Hong Kong before the new licensing regime, are currently strengthening their compliance measures. However, they must still demonstrate to the satisfaction of the SFC the actual implementation and effectiveness of these measures.
Furthermore, deemed-to-be-licensed VATPs and their owners must fully comply with all SFC regulatory requirements and refrain from marketing their services or onboarding new clients until they are formally licensed. VATPs must also ensure that their services are not accessible to residents of Mainland China, and that related entities adhere to this restriction. The SFC will conduct on-site inspections to ensure compliance, focusing on client asset protection and know-your-client processes. Any non-compliance observed will result in license application rejections and additional regulatory actions.
To protect investors, the SFC strongly advised trading only on VATPs that have been licensed by the regulator. Investors are urged to regularly check the SFC’s website for the “List of licensed virtual asset trading platforms” to verify the licensing status of the VATPs they use.
In response to the new regulatory framework, several crypto exchanges, including Okx and Gate.hk, have announced their decision to cease operations in Hong Kong.
