- Hong Kong completes first phase of VATP reviews, advancing its goal of becoming a crypto hub.
- SFC identifies gaps in virtual asset platforms, requiring improvements for regulatory compliance.
- Hong Kong sets compliance deadlines for crypto platforms, with non-compliant platforms facing shutdown.
Hong Kong is advancing towards its goal of being a cryptocurrency hub after completing the first phase of the review of its virtual asset trading platforms (VATPs). According to the Hong Kong Securities and Futures Commission (SFC), the initial inspections of these platforms have just been concluded, which is considered another important step in the development of the regulatory framework for digital assets in the city.
Leung Fung-yee, the CEO of the Hong Kong SFC, revealed that the reviews showed that a number of constraints and gaps exist in the systems. These findings have been reported to the appropriate platforms that need to make the required changes. Fung-yee added that the SFC will disclose the next step of the regulation in the near future. Those that are in compliance with the set regulatory requirements will be allowed to operate while those that are not compliant will be required to present an SFC approved plan of compliance for further consideration.
Hong Kong Compliance Deadline
The next phase of the VATP regulatory framework will also have a compliance deadline as has been the case in the past. Those platforms which do not come up to the set standards within this time frame will be considered as no longer holding a “deemed license” and will therefore be required to shut down their operations in Hong Kong gradually. Currently, 11 crypto asset platforms in Hong Kong are expected to obtain full licenses by the end of this year.
Besides the VATP reviews, the SFC has stepped up surveillance on the consolidated stock ownership, which is part of the SFC’s efforts to safeguard investors. From June to September in the year 2023, the Securities Regulatory Commission released six warnings concerning high ownership, which has more than doubled in comparison with the previous years. The commission follows the stock movements of key indices or those that are volatile.
Hong Kong’s Path to Global Crypto Hub
These measures show that Hong Kong is keen on creating a properly monitored, safe, and clear crypto trading market. To lure international crypto companies, Singapore is set to enhance its rules further establishing itself as a major player in the digital asset market.
As the SFC moves to the second phase of its crypto regulatory process, the first phase that has been concluded is a positive step towards better protection of investors and traders in the crypto market. As Hong Kong continues to strengthen its working on the regulation of cryptocurrencies, it is expected that the region will become one of the preferred places for doing business in the cryptocurrency sphere.
