Hong Kong issues warning to crypto firms

The Hong Kong Securities and Futures Commission (SFC) has issued a cautionary message to cryptocurrency exchanges, stating that licenses will not be granted to companies that fail to comply with relevant regulations. The securities regulatory body accused specific unlicensed exchanges of involvement in “improper practice.”

Moreover, certain crypto trading platforms are  falsely asserting that they have applied for licenses with the SFC, an action deemed a violation disseminating misleading or reckless representations to encourage virtual asset trading.

Certain VATPs (virtual asset trading platforms) have established new entities in Hong Kong to offer virtual asset services, although the regulator stated that such services are not allowed in Hong Kong’s new crypto regime.

In October, Hong Kong released policy statements aimed at reinforcing its role as a prominent global financial hub for digital assets. In December, the Legislative Council of Hong Kong passed an amendment establishing a comprehensive licensing framework for virtual asset service providers.

Recently, HashKey and OSL obtained licenses for retail trading under the new regulatory framework, and they are set to commence operations on June 1st.

Hong Kong, the United Arab Emirates, and even the European Union have unveiled their regulatory model for the cryptocurrency space, but the United States has lagged in establishing a framework.

This delay has resulted in the lack of  investor protection and confusion among regulators regarding oversight responsibilities.

Nevertheless, many expect the U.S. to soon unveil a proper, in-depth rule book later this year.