- Hong Kong has warned of legal consequences for companies operating without a permit.
- Trading without a license is a criminal offense, the regulator said.
- Despite the bans, individual platforms continue to launch new products.
The Hong Kong Securities and Futures Commission (SFC) said violating exchanges will not be granted a license to operate in the cryptocurrency market. The relevant document was published on Monday, August 7, on the SFC’s website.
The Hong Kong regulator has recorded several cases of stock exchanges operating without a license and called their activities a “criminal offense”. Some trading platforms claimed to have all the necessary authorizations. However, the commission said the companies had not even applied for an SFC license.
“Any person who misrepresents facts to induce another person to trade in virtual assets is in violation of the law,” the document said.
SFC noted that as part of the transition period, some entities have set up new companies to provide virtual asset trading services. They have publicly stated their intention to get a license, but have never done so. Meanwhile, such companies continue to launch new products and trade cryptocurrency, the department added.
In February, Hong Kong announced plans to open up its digital asset market to individuals. In June, when the licensing regime for virtual asset service providers began to take effect, Assemblyman Johnny Ng invited Coinbase and other exchanges to move into the region. The value of a cryptocurrency license in the region is as high as $25 million, according to a report from Foresight News.
Cryptocurrencies in the region are worth as much as $25 million.