Hong Kong’s Securities and Futures Fee (SFC) has not too long ago introduced it would conduct in-site workplace inspections for the crypto platforms searching for licensing. The watchdog highlighted that the 18 “deemed-to-be-licensed” candidates must endure the examination to obtain approval of their utility.
SFC Publicizes Crypto Inspection
On Tuesday, the SFC revealed that it will examine the platforms making use of to change into licensed digital asset buying and selling platforms (VATPs) in Hong Kong. The examination will happen within the coming months whereas the deemed-to-be-licensed VATP candidates pursue their purposes.
The on-site inspection will give attention to the crypto platforms’ safeguarding of shopper belongings and Know-Your-Buyer (KYC) processes to find out the corporate’s compliance with the SFC’s regulatory necessities.
The inspection findings “will feed into the license utility course of,” which requires VATPs and their homeowners to adjust to all relevant legal guidelines and laws. In line with the announcement, any violation or non-compliance of key regulatory necessities will outcome within the license being denied.
Furthermore, failing to fulfill traders’ safety laws throughout the inspection might outcome within the SFC taking different regulatory actions towards crypto platforms if it considers them obligatory.
The regulator additionally reminded the candidates they have to adjust to all of SFC’s regulatory necessities and licensing circumstances throughout the utility course of. These circumstances embrace stopping Mainland Chinese language residents from accessing the platforms’ digital asset-related companies, advertising and marketing their companies, or onboarding retail customers.
The SFC doesn’t anticipate these candidates to actively market their companies or onboard new retail shoppers previous to demonstrating the precise implementation and effectiveness of their insurance policies, procedures, programs, and controls to the satisfaction of the SFC and being formally licensed.
Non-Contravention Interval Ends This Week
Within the announcement, the SFC identified that the important thing deadline was approaching. Hong Kong’s watchdog reminded crypto platforms that the non-contravention interval for VATPs working within the jurisdiction ends on June 1, 2024.
As reported by Bitcoinist, the SFC issued a brand new regulatory guideline that required all VATPs working in Hong Kong to submit a license utility by February 29. After the deadline, the crypto platforms that didn’t apply for a license had a non-contravention interval underneath the Anti-Cash Laundering and Counter-Terrorist Financing Ordinance (AMLO).
Nevertheless, by June 1, all VATPs remaining within the space have to be licensed or “deemed-to-be-licensed” VATP candidates underneath the AMLO. The businesses that proceed to function after the designated interval will face authorized actions:
It’s a prison offense to function a VATP in Hong Kong in breach of the AMLO, and the SFC will take all acceptable actions towards any breaches of the regulation.
As the tip of the non-contravention interval approaches, Hong Kong’s regulator urged traders within the space to commerce digital belongings solely on SFC-licensed platforms. Moreover, Hong Kong traders have been reminded that the VATP candidates should not formally licensed regardless of endeavor measures to adjust to the SFC.
On the time of this writing, solely HashKey Change and OSL Change are licensed VATPs working within the space. The opposite 18 VATPs await the SFC’s choice on their license purposes.
