Hong Kong’s Securities and Futures Commission (SFC) will mandate the regulations of all cryptocurrency trading platforms operating in its jurisdiction.
The confirmation came from Ashley Alder, Chief Executive Officer of the Hong Kong securities watchdog, while he was speaking at the Fintech Week event on Tuesday, Reuters reported.
This move is an extension of the crypto regulatory framework introduced by the Hong Kong regulator in November last year. However, those rules are kept as ‘opt-in’, meaning it is the choice of digital asset exchanges to apply for a license and follow the regulations.
“This is a significant limitation, as under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security,” Alder said in his speech.
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Exchanges Want Easy Licenses
It is to be noted that many major cryptocurrency exchanges, including Huobi, OKEx, and BitMEX, are based and operating from Hong Kong, but are licensed by other crypto-friendly jurisdictions. The majority of these companies did not opt-in for the existing regulatory frameworks of the local jurisdiction.
Reuters highlighted that the SFC did not issue a full license to any crypto exchange. It only agreed in principle to issue a license to OSL Digital Securities, a cryptocurrency exchange of the BC Group.
The Hong Kong government will propose the new licensing measures under its anti-money laundering legislation. Thus, crypto trading platforms operating in Hong Kong or offering services in the region will be required to obtain the license.
Singapore and Japan, two other Asian cryptocurrency hubs, already require the cryptocurrency exchanges operating in the country to receive a regulatory license to continue their operations.