It is a criminal offense for VATPs to operate in Hong Kong without a license after 1 June 2023, or to continue operating after 1 June 2024 without submitting a license application by 29 February 2024.
Several cryptocurrency trading platforms operating in Hong Kong are facing the prospect of closure as the regulatory deadline set by the Securities and Futures Commission (SFC) approaches. These platforms, which have not yet complied with the new licensing requirements, must cease operations if they fail to meet the stipulated criteria by the given deadline.
The SFC has mandated that all virtual asset trading platforms (VATPs) operating in Hong Kong must be licensed. This regulation is part of a broader initiative to regulate the virtual asset industry and protect investors. The deadline for these platforms to submit their license applications is 29 February 2024.
Unlicensed crypto platforms must shutdown by 31 May
As of now, numerous platforms have either not applied for a license or are still in the application process. If they do not secure a license by 1 March 2024, they are required to shut down their operations in Hong Kong by 31 May 2024. This requirement is in accordance with the transitional arrangements under the SFC’s regulatory framework for VATPs, as outlined in Schedule 3G to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap 615) (AMLO).
Investors are being cautioned to verify the regulatory status of the platforms they use for trading virtual assets. The SFC has provided resources for this purpose, including the “List of licensed virtual asset trading platforms” and the “List of virtual asset trading platform applicants”. However, being on the applicant list does not guarantee eventual licensing, and trading on these platforms carries inherent risks.
Operating in Hong Kong without a license is a criminal offense
It is a criminal offense for VATPs to operate in Hong Kong without a license after 1 June 2023, or to continue operating after 1 June 2024 without submitting a license application by 29 February 2024.
The regulator said the public should be aware that VATPs on the applicant list are not yet licensed or regulated and might not comply with SFC requirements.
Such VATPs might not be granted licenses and may have to close down, with their names appearing on the “List of closing-down virtual asset trading platforms”. Investors are encouraged to stay informed by regularly checking this list.
