Hong Kong will implement enhanced regulations regarding over-the-counter (OTC) digital asset trading. The sector must be subject to the same regulations as retail digital asset trading.
The “Public Consultation on Legislative Proposals to Regulate the Trading of Virtual Assets in the Over-the-Counter Market” was published by the Hong Kong government on February 8, which will last until April 12. The document highlighted:
“This consultation document is issued by the Financial Services and Treasury Department (FSTB) to seek views on proposed legislative issues to regulate over-the-counter (OTC) trading in assets (VA) through the introduction of a licensing regime for VA OTC service providers under the Anti-Money Laundering and Combating the Financing of Terrorism Ordinance (Cap. 615) (AMLO)”.
The document’s main point is to suggest that OTC trade be included under the jurisdiction of the Anti-Money Laundering and Terrorist Financing Ordinance (AMLO). The legislation has been in force since June 2023.
Hong Kong regulator gives deadline for unlicensed VASPs to cease operations
Hong Kong’s regulator has highlighted the deadline for unlicensed virtual asset service providers (VASP) to cease operations there. The Department of Financial Services has advised on the February 29 deadline for unlicensed VASP applications, highlighting that unapproved providers must cease operations by May 31.
In a statement on February 2, the regulator highlighted that currently two licensed VA trading platforms, through license upgrades, are able to offer Bitcoin (BTC) and Ethereum (ETH) trading services to retail investors. .
“Licensed platforms are subject to strict regulation by the Securities and Exchange Commission (SFC) to provide substantial protection to investors. Considering that some VASPs were already operating in Hong Kong before the licensing system came into effect, a transition period was established to help these existing service providers transition to the new system. If these service providers want to continue their operations in Hong Kong, they will have to submit their license applications by February 29 this year,” he wrote.
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