The Hong Kong Securities and Futures Commission stated that license applicants who breach regulations may be denied a license for crypto retail trading under the new regime.
The Hong Kong Securities and Futures Commission issued a warning today regarding unlicensed cryptocurrency exchanges involved in “improper practices.” They emphasized that conducting unlicensed activities is considered a “criminal offense” in the city.
According to the commission’s statement, some unlicensed crypto trading platforms falsely claim to have submitted license applications to the SFC when they have not done so. The SFC stated that making fraudulent or reckless misrepresentations to induce others to trade in virtual assets is an offense.
The regulator also cautioned that license applicants violating relevant regulations during the transitional period may face license denial.
The SFC highlighted that some unlicensed Virtual Asset Trading Platforms (VATPs) are creating new entities to offer virtual asset services in Hong Kong ahead of the transitional arrangements. They may introduce certain virtual assets for retail client trading, offer virtual asset derivatives trading services, or establish arrangements involving virtual assets like ‘deposits,’ ‘savings,’ or ‘earnings,’ which are not permitted under the new regime.
Hong Kong’s New Licensing Regime
Unlike mainland China, which has implemented a broader crackdown on cryptocurrencies, Hong Kong has adopted a more welcoming approach towards crypto firms. The city has even encouraged banks to collaborate with them.
In October, Hong Kong authorities issued policy statements aimed at bolstering its status as a global financial center and supporting cryptocurrencies. In December, the Legislative Council passed an amendment introducing a full licensing regime for virtual asset service providers.
Recently, HashKey and OSL secured the first licenses to offer retail trading under Hong Kong’s new licensing regime, which began on June 1.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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