Hong Kong Government Announces Update On Crypto Trading Regulation
The Hong Kong government has announced today that it is making moves to regulate crypto trading around the region’s financial hotspots.
In a bid to kickstart the regulation, the government of the Asian nation has ordered all crypto trading platforms to apply for a mandatory license.
According to Reuters’ report, the government wants to use this new order to check the previous regulations’ excesses. According to the government, the crypto trading platforms will need to submit an application to Hong Kong’s Securities and Futures Commission to be granted the official trading license.
Crypto exchanges to start applying for a trading license from SFC
The first crypto trading regulatory framework was developed and established by Hong Kong Securities and Futures Commission back in 2019. The framework was launched to check the activities of crypto exchanges when carrying out their operations. However, the framework didn’t cover all crypto trading platforms in the region.
The exchanges that were listed were the ones that only listed their traded assets as securities. With the previous framework, crypto exchanges that dealt in crypto trading were left untouched. However, the government has decided to update the previous framework and include all crypto exchanges in the region under the new framework.
Giving a review of the new regulation, Chief Executive of the SFC, Ashley Alder, has said that exchanges that do not want to be classified under this framework will need to ensure the assets they traded are not classified as securities.
“This is a significant limitation, as under the current legislative framework, if a platform operator is determined to operate completely off the regulatory radar, it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security,” Alder said.
Furthermore, the SFC has stated that the new framework will check the activities of crypto exchanges and also guide platforms that target investors.
Hong Kong government plans to tackle money laundering with new framework
The Securities and Futures Commission has also announced that it has already agreed to issue its first authorization license to OSL Digital securities, the crypto trading branch of the famous BC Technology Group Limited.
Notably, the firm also has the strong backing of Fidelity, another renowned company in the region. Presently, the SFC is yet to grant any firm a full license since the framework came into existence in 2019. But with this new development, it looks like things are about to change in the region.
Crypto exchanges like Huobi, OKEx, and BitMEX are some of the big crypto exchanges with a branch of their operation in Hong Kong. Ashley Alder, the Chief Executive of the SFC, also said that another reason the new framework was being set up is to check money laundering by crypto exchanges in the region.
Alder stated that the SFC received a petition from the Financial Action Task Force back in February, which led to the government of Hong Kong announcing stringent measures on crypto exchanges to check money laundering.
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