Katherine Ross

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



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



The SFC claims that “anticipating the transitional arrangements, some unlicensed [virtual asset trading platforms] set up new entities to provide virtual asset services in <a href="https://blockworks.co/tag/hong-kong">Hong Kong</a>.“



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 <a href="https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR87">continues</a>.&nbsp;



The SFC maintains a <a href="https://www.sfc.hk/en/Welcome-to-the-Fintech-Contact-Point/Virtual-assets/Virtual-asset-trading-platforms-operators/Lists-of-virtual-asset-trading-platforms">list</a> of licensed crypto exchanges. Only two are listed currently: HashKey and OSL Exchange.



Read more: <a href="https://blockworks.co/news/hong-kong-crypto">Why Hong Kong could be crypto&#8217;s next &#8216;center of gravity&#8217;</a>



“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 <a href="https://blockworks.co/news/hong-kong-to-lift-crypto-ban">lifted the crypto retail trading ban </a>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 <a href="https://blockworks.co/news/hong-kong-banks-embrace-crypto">pushing for major banks to take on crypto exchanges</a> 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.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Hong Kong

Hong Kong regulator issues warning about unlicensed crypto platforms

Shalini Nagarajan

<div id="highlights-block_62a9caaa6dbdc" class="highlights">
 <ul>
 <li>FINRA plans to boost resources to better understand and observe cryptocurrencies</li>
 <li>The move aligns with the SEC&#8217;s plans to hire more staff for crypto enforcements</li>
 </ul>
 
</div>



The Financial Industry Regulatory Authority (FINRA) is gearing up for more involvement in cryptocurrency after several organization members have shown interest in trading digital assets.



While federal agencies consider market protection measures, FINRA expects to play a role in policing digital asset markets, <a href="https://www.reuters.com/markets/us/wall-st-watchdog-finra-bulk-up-crypto-capabilities-ceo-says-2022-06-14" target="_blank" rel="noreferrer noopener">Reuters</a> reported CEO Robert Cook saying at an industry conference on Tuesday.&nbsp;



Cook said FINRA — which regulates registered brokers and broker-dealers in the US — will need to engage with the industry and requires resources to do so. 



FINRA has approved dozens of its members to trade in cryptocurrencies, Cook said. Boosting resources and staff aside, the non-governmental watchdog is exploring whether it can perform cross-market surveillance across blockchains, he added.



Cook even encouraged employees recently laid off by crypto companies to call him. Tumbling crypto prices have triggered layoffs at major crypto exchanges, including <a href="https://cms.blockworks.co/coinbase-cut-workforce-ceo-wary-of-potential-recession/" target="_blank" rel="noreferrer noopener">Coinbase</a>, <a href="https://cms.blockworks.co/gemini-joins-growing-list-of-crypto-exchanges-cutting-staff-amid-downturn/" target="_blank" rel="noreferrer noopener">Gemini</a>, <a href="https://cms.blockworks.co/crypto-com-cutting-5-of-workforce-amid-digital-asset-downturn/" target="_blank" rel="noreferrer noopener">Crypto.com</a>, BitMEX, Buenbit and Bitso. 



Echoing Cook, SEC Chair Gary Gensler called for urgent action to protect crypto investors and other market participants in a video interview on Tuesday, <a href="https://twitter.com/WSJ/status/1536760747526705157" target="_blank" rel="noreferrer noopener">citing</a> this week’s account lockouts at Celsius.



Last month, the SEC (which oversees FINRA) <a href="https://www.sec.gov/news/press-release/2022-78" target="_blank" rel="noreferrer noopener">pledged</a> to boost the headcount of its Crypto Assets and Cyber Unit enforcement division from 30 to 50 dedicated positions.



In any case, FINRA’s Cook isn&#8217;t alone in seeking fired blockchain industry employees during one of the space&#8217;s most turbulent periods in years. Crypto entrepreneur Justin Sun said in a Tuesday <a href="https://twitter.com/justinsuntron/status/1536691175423365126" target="_blank" rel="noreferrer noopener">tweet</a> that his firms TRON, Poloniex, BitTorrent, USDD, APENFT, JUST Foundation and SunIO are actively hiring.



Binance also <a href="https://twitter.com/cz_binance/status/1537013824666095617" target="_blank" rel="noreferrer noopener">said</a> it has 2,000 open position while Kraken flagged its global hiring push in a <a href="https://blog.kraken.com/post/14372/kraken-announces-global-hiring-push-and-commitment-to-crypto-first-culture/" target="_blank" rel="noreferrer noopener">blog</a>, confirming plans to fill more than 500 positions this year.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

cryptocurrency

Wall Street Regulator FINRA Wants To Hire Fired Crypto Employees

Ben Strack

<div id="highlights-block_61ef24747796a" class="highlights">
 <ul>
 <li>Roisman announced last month he intended to resign from the SEC</li>
 <li>Knight also spent two years as counsel for SEC Commissioner Hester Peirce, who has advocated for a crypto regulatory framework</li>
 </ul>
 
</div>



The former counsel for Securities and Exchange Commission (SEC) Commissioner Elad Roisman has left the agency to join Coinbase.



Thaya Knight’s last day at the SEC was Friday, she wrote on LinkedIn. Her role at Coinbase as a senior public policy manager entails watching the regulatory landscape, which companies expect <a href="https://cms.blockworks.co/crypto-companies-brace-for-year-of-regulation-in-2022/" target="_blank" rel="noreferrer noopener">to evolve in 2022.</a>



“What we want to do as Coinbase is make sure that we’re raising our hand when we feel the rules of the road are not clear,” <a href="https://cms.blockworks.co/coinbase-president-crypto-on-pace-for-1-billion-users-within-5-years/" target="_blank" rel="noreferrer noopener">Coinbase President Emilie Choi said</a> at the Bloomberg Financial Innovation Summit last month.



Knight worked for about a year as the counsel for Roisman, who was appointed to the SEC by then-President Donald Trump in 2018. Roisman <a href="https://www.sec.gov/news/statement/roisman-20211220" target="_blank" rel="noreferrer noopener">said in a statement</a> last month that he intended to resign by the end of January.  



Before working for Roisman, Knight spent about a year as senior counsel for policy and regulation for the Federal Housing Finance Agency.&nbsp;



She was also previously counsel to SEC Commissioner Hester Peirce, who <a href="https://cms.blockworks.co/hester-peirce-theres-a-jurisdiction-battle-over-crypto-regulation/" target="_blank" rel="noreferrer noopener">has been critical</a> of the agency’s <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/">fai</a><a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">l</a><a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/">ure to approve a spot bitcoin ETF.</a>   



Knight declined to comment on her move. A spokesperson for Coinbase did not immediately return a request for comment.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

regulator

Newsletter

Blockworks Research