The Securities and Futures Commission (SFC) released its position print on aparente asset exchanges Wednesday, launching a new licensing scheme not wearing running shoes said is not dissimilar of this one applied to Hong Kong’s security brokers and currency trading trading venues.
Hong Kong’s stock options watchdog is to treat cryptocurrency trading platforms like traditional middleman if they offer security also, according to its second surrounding of regulatory guidance for the industry.
Any virtual asset institution trading at least one security small falls under the regulator’s acumen. Applications for peer-to-peer (P2P) exchanges – such as decentralized exchanges (DEX) or non-custodial trade platforms – is definately reviewed by the SFC.
Under the new security licensing conditions, regulated crypto exchanges can only offer products that “professional investors” as set by the SFC. Firms could have also only alter products or services if you focus on approval by the regulator and as a consequence must have an existing relationship because independent auditing firm, medical history annual reports on share activities. Exchanges must much deeper file monthly reports toward the commission.
Top wallets – crypto hosting with live connections online – may not hold more than 2 percent of an exchange’s total funds. While programs are mandated to have travel insurance for all assets in the event of your breach or hack, the exact SFC states.
Anti-money laundering (AML) in addition know-your-customer (KYC) procedures probably are cited as a chief worries, with the SFC saying trading exchanges must take steps to “establish the true and full personality of each of its clients, and of each client’s financial situation, outlay of money experience and investment goals and objectives. ”
Upon the granting of a security officer license, firms enter into the SFC Regulatory Sandbox which the limiter says brings more challenging reporting and monitoring quality.
The limiter also passed a warning Wednesday to providers because of cryptocurrency-based futures products directed at Hong Kong citizens without the right amount of paperwork. The SFC understood it “has not accredited or authorised any person located in Hong Kong to offer or exchange strikes virtual asset futures contracts” to date and remains “unlikely to grant a driving licence or authorisation to carry on a company in such contracts. ”
Crypto derivative organisations like BitMEX and OKEx yet restrict access to their products present in Hong Kong.
Been approved in November 2018 and as a result updated this October, generally the SFC’s first crypto security guard licensing scheme, concerning funds which often invest 10 percent or more earnings portfolios in crypto, supports only provided the green light to one fund in the past season.