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The Hong Kong Securities and Futures Fee (SFC) has introduced that it’ll perform on-site compliance checks on native digital asset buying and selling platforms (VATPs) which are nonetheless within the means of finishing their regulatory functions after the June 1 licensing deadline.
In a discover issued on Might 28, the SFC emphasised that each one native crypto buying and selling platforms should be both licensed or “deemed-to-be-licensed” by the regulatory physique earlier than the June 1 deadline. Working an unlicensed VATP in Hong Kong after this date could be thought-about a prison offense, and the SFC could be actively pursuing non-compliant corporations.
The SFC said that within the coming months, it should conduct on-site inspections of deemed-to-be-licensed VATP candidates to evaluate their compliance with the regulatory necessities. The inspections will place specific emphasis on how these corporations are safeguarding shopper belongings and implementing Know Your Buyer (KYC) processes.
Warnings and investor safety
The regulatory physique urged traders to solely commerce cryptocurrencies on SFC-licensed platforms to make sure their safety. It additionally warned corporations searching for licenses to not actively market their providers or onboard new retail shoppers till they’re formally licensed.
Moreover, the SFC reminded these corporations to forestall mainland Chinese language residents from accessing their providers, according to the nation’s ban on cryptocurrency buying and selling.
Earlier this month, it was reported that the variety of crypto exchanges searching for operational licenses in Hong Kong had been steadily reducing. A complete of 11 crypto corporations and exchanges, together with well-known platforms like OKX and Huobi’s native arm, withdrew their functions forward of the deadline. As of now, solely 18 functions stay pending approval.
In response to the upcoming licensing necessities, some crypto corporations have taken proactive steps to make sure compliance. For example, Gate.HK, a crypto alternate, ceased all actions associated to buying new customers and advertising, prevented current customers from making deposits, and commenced delisting tokens on Might 23. The alternate plans to relaunch its providers after reconstructing its platform to adjust to Hong Kong’s regulatory necessities.
In line with the SFC, solely two corporations, OSL Digital Securities Restricted and Hash Blockchain Restricted, have been granted a license to function in Hong Kong to this point.
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