Bitrabo Editorial
The Securities and Futures Commission (SFC) in Hong Kong has announced plans to conduct on-site office inspections for crypto platforms seeking licensing. The 18 “deemed-to-be-licensed” applicants will need to undergo this examination to secure approval for their applications.
SFC’s Inspection Details
The SFC disclosed that it will be inspecting platforms applying to be licensed virtual asset trading platforms (VATPs) in Hong Kong. These inspections will take place in the upcoming months while VATP applicants pursue their licensing applications.
The focus of these on-site inspections will be on how crypto platforms safeguard client assets and their Know-Your-Customer (KYC) processes to ensure compliance with the SFC’s regulatory requirements.
Findings from these inspections will influence the license application process. Any violations or non-compliance with regulatory requirements might lead to the denial of the license. Additionally, failure to adhere to investor protection regulations during inspections could prompt the SFC to take further regulatory actions.
Applicants were reminded to comply with all regulatory requirements and licensing conditions set by the SFC throughout the application process. These conditions include restrictions on Mainland Chinese residents from accessing certain services provided by the platforms.
Upcoming Deadline
The SFC highlighted the approaching deadline, noting that the non-contravention period for VATPs in Hong Kong ends on June 1, 2024. Failure to obtain a license or deemed-to-be-licensed status by then may result in legal actions against remaining VATPs.
VATPs in Hong Kong were required to submit license applications by February 29, according to a new regulatory guideline from the SFC. By June 1, all VATPs must be licensed or deemed-to-be-licensed under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
The SFC emphasized the importance of trading virtual assets only on licensed platforms as the non-contravention period nears its end. Currently, only HashKey Exchange and OSL Exchange are licensed VATPs in operation, while the approval status of the other 18 applicants is pending.