Hong Kong’s SFC Seeks Feedback on Proposed OTC Crypto Licensing System

SFC and C&ED to Oversee New OTC Crypto Licensing System in Hong Kong

Industry participants have been asked for their thoughts on whether a new licensing system for over-the-counter (OTC) cryptocurrency services should be implemented by Hong Kong’s Securities and Futures Commission (SFC). Under the new system, firms providing cryptocurrency OTC trading services will be subject to supervision by the SFC and the Customs and Excise Department (C&ED).

In a proposal made public in February, C&ED was initially to manage all licenses and regulations for OTC services, according to an article in the South China Morning Post. Recently, the SFC asked businesses that presently offer OTC trading services for feedback on how to best adopt a new licensing system for firms that handle crypto custodians. The SCMP story quoted unnamed sources to state that discussions on both of these licenses are still in their early stages.

SFC Warns Investors: Unregistered Crypto Platforms Pose Risk Amid Hong Kong’s Digital Asset Expansion

In the meantime, the SFC has released a list of alert names that includes unregistered businesses doing business in Hong Kong as well as suspicious virtual asset trading platforms. Investors in Hong Kong may be the target of these businesses, according to SFC. Since January 2020, unregistered businesses or dubious websites have been listed on the alert list.

In an effort to become recognized as a worldwide center for cryptocurrencies, Hong Kong has been working to draw investors and associated companies to the digital assets sector in the special administrative region. Operating an unregistered virtual asset trading platform (VATP) in Hong Kong is now illegal as of June 1. Hash Blockchain and OSL Digital Securities are the two platforms for trading virtual assets that are currently fully approved in Hong Kong.

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