Hong Kong launches consultation for virtual asset trading platforms

The SFC is seeking views on whether to allow license platform operators to serve retail investors.

The Securities and Futures Commission (SFC) has launched a consultation on the proposed requirements for operators of virtual asset trading platforms.

Beginning 1 June, all centralised virtual asset trading platforms doing business or actively marketing in Hong Kong or to Hong Kong investors will need to hold a license from the SFC. The new regulatory requirements are based on the regulatory requirements of the existing regime under the Securities and Futures Ordinance, the SFC said. 

In the consultation, the commission is seeking views on whether to allow license platform operators to serve retail investors. If yes, SFC is also consulting on the measures to be implemented in addition to the proposed range of robust investor protection measures, which include ensuring suitability in onboarding clients and token admission.

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“In light of the recent turmoil and the collapse of some leading crypto trading platforms around the world, there is clear consensus among regulators globally for regulation in the virtual asset space to ensure investors are adequately protected and key risks are effectively managed,” said Julia Leung, the SFC’s CEO, commenting on the consultation.

SFC reminded virtual asset trading platforms who plan to apply for a license to review and revise their systems and controls to prepare for the new regime.

“Those which do not plan to apply for a license should start preparing for an orderly closure of their business in Hong Kong,” SFC said.