Too many unlicensed virtual asset trading platforms offer cryptocurrencies or derivatives products to retail customers, as well as deposits or profits from virtual assets, officials lamented.
Some platforms claim to have applied for a license, though they really haven’t, the regulator assures us. These misleading statements create a sense of confidence in the public that virtual asset service providers are compliant with SFC regulations.
The regulator noted that such misrepresentation to induce others to trade in virtual assets is an offense. Even if a company that has already applied violates the rules during the application review period, the agency can deny the work permit.
The SFC unveiled the licensing rules for cryptocurrency exchanges, which came into effect on June 1. Unlike mainland China, Hong Kong aims to become a center for cryptocurrency development. The Hong Kong Monetary Authority (HKMA) is encouraging big banks such as HSBC, Standard Chartered and Bank of China to serve cryptocurrency exchanges as clients.
Last week, trading platforms HashKey and OSL became the first exchanges to receive retail trading licenses for virtual assets under Hong Kong’s new licensing regime.