- Hong Kong’s Securities and Futures Commission (SFC) has stressed the consequences of non-regulation for crypto firms.
- All virtual assets trading platforms are required to register before June 1.
- Failure to register attracts criminal sanctions, with users urged not to utilize non-compliant firms.
Hong Kong’s SFC emphasizes the importance of crypto firm registration before the June 1 deadline to avoid criminal sanctions.
Non-Registration Is a Criminal Offense
In a May 28 announcement, the regulator pointed out that a breach of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) is a criminal offense, prompting the SFC to take appropriate actions against offenders. According to the release, all firms operating in Hong Kong must either be registered or “deemed-to-be-licensed” under the law.
Investor Guidance
Investors are urged to trade only with SFC-licensed firms and confirm the firm’s status from the SFC website. For deemed-to-be-licensed firms, the SFC warned that they are not yet licensed but have been operating before the legal regime and have undertaken to enhance certain policies and structures. These firms must comply with all guidelines and are not expected to onboard new retail clients until guidelines are obeyed. Additionally, firms must prevent mainland Chinese residents from utilizing their services.
Hong Kong Tightens Crypto Regulation
Hong Kong regulators have increased crypto scrutiny in the past months, citing investor protection to prevent market collapses. The country has released a series of guidelines to regulate the crypto market. The jurisdiction, once regarded as crypto-friendly, has seen a shift in its regulatory framework, with some analysts suggesting a future change in mainland China.
Global Regulatory Trends
Globally, crypto regulation is taking shape as authorities seek clear rules for crypto firms and users. From the landmark Markets in Crypto Assets (MiCA) regulation, lawmakers are seeking to tighten rules to ensure market stability and investor protection.
Conclusion
Hong Kong’s SFC is taking significant steps to regulate the crypto market, emphasizing the importance of registration and compliance with guidelines. Investors are advised to engage only with compliant firms to avoid potential risks. As global regulatory trends evolve, the emphasis on clear and stringent rules is expected to continue, shaping the future of the crypto industry.
