Compliance and Enforcement Measures by Hong Kong Securities and Futures Commission
The Hong Kong Securities and Futures Commission (SFC) has recently announced its intention to conduct on-site inspections of local virtual asset trading platforms (VATPs) that have not completed their regulatory applications by the June 1 deadline. The SFC’s move serves as a stern reminder to crypto companies regarding the importance of obtaining licensing within the stipulated timeframe.
“After June 1, all local crypto trading platforms in Hong Kong must be licensed or ‘deemed-to-be-licensed’ by the SFC,” the official announcement emphasized.
- Operating without a license post the deadline will be deemed a criminal offense by the SFC.
- The commission plans to focus on ensuring compliance with regulatory requirements such as client asset safeguarding and Know Your Customer (KYC) processes through upcoming on-site inspections.
Outlook on Crypto ETFs and Competition in Hong Kong
In a related development, Hong Kong has introduced its initial series of ETFs centered on cryptocurrencies, signaling potential competition for established Bitcoin products in the United States. Harvest Global Investments Ltd., in partnership with companies like HashKey Capital Ltd. and Bosera Asset Management (International) Co., has recently listed Bitcoin and Ether ETFs in Hong Kong.
“The introduction of Bitcoin and Ether funds in Hong Kong could see an estimated accumulation of approximately $1 billion over the next two years,” according to Bloomberg Intelligence’s Rebecca Sin.
- CF Benchmarks CEO, a subsidiary of Kraken exchange, predicts that Hong Kong’s crypto ETFs will experience substantial growth and could amass over $1 billion in assets by the end of 2024.
