Hong Kong regulator issues warning about unlicensed crypto platforms

According to a list on the SFC’s website, HashKey and OSL Exchange are the only two crypto platforms currently licensed in Hong Kong

share

Hong Kong’s Securities and Futures Commission issued a warning Monday about unlicensed crypto platforms “engaging in improper practices.” 

The warning addresses both investors as well as the unlicensed platforms themselves — some of whom, the SFC said, claim to have submitted an application to the regulator despite not actually complying with its rules. 

The SFC claims that “anticipating the transitional arrangements, some unlicensed [virtual asset trading platforms] set up new entities to provide virtual asset services in Hong Kong.“

Some of the VATPs claiming to have applied for licenses “may not be in compliance with the legal and regulatory requirements under the new regime,” the SFC continues

The SFC maintains a list of licensed crypto exchanges. Only two are listed currently: HashKey and OSL Exchange.

Read more: Why Hong Kong could be crypto’s next ‘center of gravity’

“Other unlicensed VATPs may have publicly announced an intention to apply for a license from the SFC,” but have not done so, the warning to investors continues.

Hong Kong regulators laid out a licensing program earlier this year and lifted the crypto retail trading ban back in May as it gears up to be more of a crypto hub.

However, neither existing nor new entities can “launch certain virtual assets for trading by retail clients” or offer services in digital asset derivatives. Deposits, savings or earnings “arrangements” are also banned under the current regulatory structure.

While it is a crime for a crypto platform to market itself as licensed when it’s not, the SFC further noted that any platforms caught claiming to be applying for a license or having received a license would be penalized if they were to ever pursue actual approval with the SFC.

In addition to releasing regulatory framework, Hong Kong has also been pushing for major banks to take on crypto exchanges as clients to encourage further innovation.

As the Hong Kong Monetary Authority said in an April letter: “Maintaining safe and efficient banking system[s] and promoting access to basic banking services for legitimate businesses are key priorities.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly

article-image

Plus, all the world is green as prices across the crypto space rally, with solana reaching a nearly two-week high

article-image

Investors add to crypto positions after “turnaround in sentiment due to lower-than-expected CPI,” CoinShares research head says

article-image

Plus, Ethereum is in the midst of a vibecession