- The Hong Kong Securities and Futures Commission (SFC) has issued a circular on transitional arrangements for a new licensing system for virtual asset trading platforms.
- This circular only applies to VATPs that provide trading services with non-security tokens.
- During the transition period, the platform can continue to provide services from June 1, 2023, to May 31, 2024.
Yesterday, the Hong Kong Securities and Futures Commission (SFC) issued a circular on transitional arrangements for a new licensing system for virtual asset trading platforms willing to comply with the guidelines.
This circular provides a reasonable amount of time for them to apply for permits and to review and modify their systems and controls. Comply with applicable legal and regulatory requirements. Virtual asset trading platforms that do not intend to apply for a license should proceed to close their business in an orderly manner.
Virtual asset trading platforms that provide virtual asset services in Hong Kong and have substantive and meaningful business before June 1, 2023, can be used between June 1, 2023 to May 31, 2024.
Please continue to provide virtual assets services in Hong Kong under a no-frills agreement without violating the licensing requirements under the Anti-Money Laundering Ordinance. To be eligible for the forward agreement, virtual asset trading platforms must provide virtual asset services in Hong Kong by June 1, 2023.
Factors that SFC will consider when assessing whether VATP was operating and conducting genuine business with an actual presence in Hong Kong prior to June 1, 2023, include:
- Whether it is incorporated in Hong Kong;
- Whether it has a physical office in Hong Kong;
- Whether their Hong Kong employees exercise centralized management and control over VATP;
- Whether the organization’s key employees (e.g., those responsible for operating the trading system) are based in Hong Kong;
- Whether VATP’s operations are direct with independent customers and accurate trading volume in Hong Kong;
- Are there other factors (e.g., the establishment of the trading system, trading arrangements, and organizational structure of the VATP) that could demonstrate that VATP was operating in Hong Kong before June 1. 2023 or not?
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
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