Search Inside Bitcoins

Hong Kong’s SFC to Issue Strict Crypto Exchange Licensing Guidelines in May

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Hong Kong’s SFC crypto exchanges
Hong Kong’s SFC crypto exchanges

Join Our Telegram channel to stay up to date on breaking news coverage

Hong Kong’s Securities and Futures Commission (SFC) is set to release guidelines for cryptocurrency exchange licensing in May. The SFC’s CEO, Julia Leung, revealed the news at an event and stated that there have been over 150 responses to the ongoing consultation process for the regulatory framework for crypto entities in the city.

The SFC’s CEO stated that the guidelines are part of Hong Kong’s efforts to bolster the region’s growing cryptocurrency industry and support trading platforms offering services to retail investors. With the introduction of these guidelines, Hong Kong is taking a significant step forward in its bid to become a leading cryptocurrency hub in Asia. 

The new regulatory framework is set to come into effect on June 1, and it will mandate that crypto platforms register with the authorities of the city. Licensed exchanges will be allowed to offer cryptocurrency trading of major cryptocurrencies such as Bitcoin and Ethereum to retail traders.

Two Crypto Exchanges are Already Licenced by Hong Kong’s SFC

Hong Kong is seeking to become a financial hub for cryptocurrency in Asia. Two exchanges, Hashkey and OSL, are already offering crypto trading services under the supervision of the Hong Kong SFC. The city’s banking sector is also supportive of crypto firms, making it an attractive destination for crypto exchanges. Therefore, more exchanges might open up in the future. Following the U.S. financial crisis, a number of cryptocurrency companies are on the lookout for new banking partners. As more banks in the area adopt cryptocurrencies, Binance CEO Changpeng “CZ” Zhao previously predicted that more funds would move to Hong Kong.

While Hong Kong is making an effort to become a leading player in the crypto industry, some exchanges are also leaving the market due to regulatory requirements. Bitget, a cryptocurrency exchange, announced on April 24, 2023, that due to new legal and regulatory requirements, it will no longer offer services to users in Hong Kong. The exchange instructed all its Hong Kong customers to switch to its subsidiary, BitGetX HK.

The guidelines have been prepared after a thorough consultation process, which included a report released on February 20. The report emphasized the importance of Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulatory requirements in the forthcoming licensing guidelines.

However, the mixed response from crypto exchanges highlights the challenges Hong Kong faces in achieving its ambition to become a leading crypto hub. Nevertheless, the forthcoming guidelines have the potential to pave the way for a more secure and prosperous crypto market in the region.

The new licensing regime is set to promote transparency and prevent illicit activities within the cryptocurrency market, which will benefit both trading platforms and investors. By implementing a robust licensing regime, the SFC aims to attract more trading platforms and investors while ensuring regulatory compliance and transparency.

More News

Join Our Telegram channel to stay up to date on breaking news coverage

Read next