Hong Kong: finally licenses for crypto platforms!

Hong Kong: finally licenses for crypto platforms!

Cryptocurrencies are severely affected and destroy their value. However, while some continue to vehemently reject them, others think of ways to control them in order to take advantage of them better. With that in mind, Hong Kong will finally offer licenses for crypto platforms.

The crypto sector aligns with the financial sector

With the decline in the cryptocurrency markets, more and more investors are jumping in. Meanwhile, powerful negotiators continue the path and pursue their ambitions. However, this does not change the view of regulators who continue to believe that digital assets need to be regulated. Bitcoin, like many other cryptocurrencies, is suffering from the wrath of these institutions and it is the crypto platforms that are suffering.

Given the context, Hong Kong has finally passed new legislation to regulate the crypto industry. As a result, crypto service providers will be able to obtain a license to operate in the city. The amendments aimed at regulating the crypto space in Hong Kong have been submitted to the Legislative Council of the Special Administrative Region of China. The Terrorist Financing and Anti-Money Laundering Bill 2022 is expected to pass two readings and become law.

The people behind this project are particularly focused on transparency. This is why they believe that Virtual Asset Service Providers (VASPs) should obtain a license to operate in the cryptocurrency industry. Thus, cryptocurrency companies will be recognized as a financial services entity in Hong Kong.

Thus, no crypto platform can without regulatory approval. However, they still see crypto assets as a constant challenge and risk. And its instability raises questions about the decision that will be taken. Investor protection can get complicated quickly in this situation. So crypto platforms must meet certain conditions in order to be able to operate with complete peace of mind.

Licenses for crypto platforms … but also requirements

Crypto platforms wishing to obtain a license in Hong Kong must meet certain requirements. In fact, members of the legislature are still not sure whether they trust cryptocurrencies. While recognizing its positive potential, the weakness of these assets should not be underestimated. Hence, crypto service providers wishing to operate in the territory must obtain a license from the Hong Kong Securities Futures Commission (SFC). The proposal takes many details into account. Among the recommendations of the Financial Action Task Force against Money Laundering (FATF). This is very important because it is this group that sets all the world standards in this field.

With the adoption of the new legislation, the operations of crypto platforms will come under the control of the SFC. In fact, the organization will have to ensure that VASPs observe the rules and respect the laws of the sector. As such, you will need to ensure that suppliers adopt appropriate listing and trading policies. But also, they must respect disclosure procedures and financial information. But above all, the commission will also implement mechanisms to combat conflict of interest and market manipulation.

The adoption of cryptocurrencies is uncertain, especially given the current state of the market. While some investors who have said they believe in the potential of digital assets are withdrawing, skepticism is growing in the markets. However, Hong Kong is willing to take the risk as it has passed a new law aimed at regulating the sector. Crypto platforms will then be able to operate legally in the same way as the financial sector. However, the instability of cryptocurrencies can make everything questionable.

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Eddie Senga's Avatar

Eddie Senga

The world is changing and adaptation is the best weapon to survive in this undulating universe. As a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. In order to share my experience and introduce a field that fascinates me, nothing is better than writing articles that are useful and comfortable at the same time.

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