Hong Kong SFC to comply with the offices of crypto companies after the license expiration period
Hong Kong's Securities and Futures Commission (SFC) said it will conduct “on-site inspections” of local virtual asset trading platforms (VATPs) that are still in their regulatory applications after the June 1 licensing deadline.
The SFC reminded crypto companies on May 28 of their requirement to obtain a license before June. After the deadline, all domestic crypto trading platforms must be licensed or “considered to be licensed” by the SFC.
Applicants who are considered licensed will fall under a short-term framework for crypto companies that were already operating in the region before the licensing system was rolled out.
After June 1, operating an unlicensed VATP in Hong Kong is a crime and the SFC will prosecute companies in person.
“In the coming months, as licensed VATP applicants pursue their applications, the SFC will conduct on-site inspections to ensure compliance with the SFC's regulatory requirements,” the SFC said.
It added that there will be a “special focus” on how the companies protect customer assets and carry out Know Your Customer (KYC) procedures.
The SFC urges investors to trade crypto on platforms licensed by the SFC.
It warned companies seeking licenses not to market services or take on new retail customers and Mainland Chinese residents to use their services until they receive formal approval.
Related: Hong Kong crypto exchange bows to regulatory pressure
Earlier this month, the number of crypto exchanges seeking operating licenses in Hong Kong has gradually decreased.
A total of 11 crypto companies and exchanges, including OKX and Huobi's local arm, withdrew their applications before the deadline, while 18 applications are still pending approval.
Crypto exchange Gate.HK has stopped all activities related to acquiring new users and trading, banned existing users from making deposits, and started canceling tokens on May 23.
Hong Kong plans to resume services after rebuilding its platform to comply with regulatory requirements.
According to the SFC, only two companies, OSL Digital Securities Limited and Hash Blockchain Limited, are licensed to operate in Hong Kong.
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