2023-06-14 03:42:41
In summary
- Hong Kong launches manual for cryptocurrency companies and establishes guidelines to operate in the country.
- Businesses can operate under “transitional arrangements” for one year before applying for a business license in 2024.
- The guidelines require the presence of “regulated individuals” and set out requirements for doing business with Hong Kong residents.
In an effort to position itself as a cryptocurrency hub, Hong Kong released its Virtual Asset Trading Platform (VATP) manual earlier this month. The Securities and Futures Commission (SFC) has provided the guidelines for cryptocurrency companies wishing to operate in the country and will oversee all licenses.
Gilbert Ng, a lawyer at the Hong Kong Special Administrative Region High Court and Chris Lee, founder of TKX Capital, provided an explanation of the guidelines which was translated and published today by Wu Blockchain.
The idea behind the “transitional agreements” is to offer a one-year trial period for cryptocurrency companies operating in the country. Businesses can apply for a business license in 2024 if they meet all the requirements.
According to translated post, companies will be allowed to operate if the SFC determines that they have “genuine operations and bona fide business practices.” The document noted that this applies only to non-securities trading platforms.
What constitutes as genuine operations and genuine practices? The SFC has determined several factors, including: whether the platform is based in Hong Kong, whether it is controlled and operated by employees based in the city, whether it has an office there, among many others. other requirements.
The Hong Kong guidelines seek to put more responsibility on operators, or the people who run cryptocurrency exchanges. It establishes the presence of “regulated individuals” such as directors, responsible officers and managers.
These people, according to the new rules and regulations approved, will have to pass a test of “suitability and capacity”. This will require cryptocurrency company officials to demonstrate relevant experience in regulated environments, even if that experience is in other countries.
He manual it also states that companies “actively trading with Hong Kong residents” are under the supervision of regulators. There are also guidelines that state whether a company requires a license from the SFC, such as the existence of a detailed marketing plan aimed at retail investors in the city or whether trading in Hong Kong dollars is allowed.
It appears that Hong Kong regulators are taking a tough stance on corporate liability after the deplorable and disappointing performances of some cryptocurrency companies this year.
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