- Hong Kong units a 12-month transition to the brand new VATP licensing regime.
- Beneath the brand new guidelines, VATP should exhibit that there’s a vital degree of locality.
- Failure to adjust to the brand new guidelines might end in felony proceedings.
Hong Kong is strengthening controls on its digital asset buying and selling platforms (VATs) in preparation for a 12-month transition section beginning in 2023. June 1 The brand new regulatory framework is aimed toward combating cash laundering and terrorist financing, in keeping with the revealed round. Hong Kong Securities and Futures Fee (SFC).
Current VATPs have till 2024. Could 31 adapt to the brand new laws and have to be energetic within the area in keeping with particular standards, resembling a bodily workplace, native administration and employees based mostly in Hong Kong. Nevertheless, the SFC has made it clear that mere firm registration or fictitious transactions is not going to move the suitability check.
Platforms that present securities token buying and selling companies are topic to completely different guidelines of the Securities and Futures Ordinance. Such VATPs should purchase the suitable license earlier than beginning their actions. Nevertheless, the SFC round solely applies to platforms that provide non-security token buying and selling companies.
The round gives flexibility for VATPs already working in Hong Kong till 2023. in June These platforms can proceed to function in the course of the transition interval with out violating the licensing guidelines in the event that they work to acquire the required license.
New VATPs whose objective is to begin operations in a city-state aren’t afforded such a luxurious. They have to first safe a license or face felony prices for unlawful actions. This rule additionally applies to individuals performing regulated features on such platforms.
As a last-ditch lifeline, the SFC imposed a “Determinative Association” that will permit VATPs and their proposed managers or brokers who meet sure situations to proceed working from 2024. June 1, whereas their license functions are nonetheless pending.
Hong Kong has seen vital developments within the cryptocurrency house in current months, reflecting the rising curiosity and use of digital property. Finance Secretary Chen Mao’s announcement final week mirrored the federal government’s recognition of the potential of Web3 and digital property and its dedication to selling accountable development within the sector.
