Hong Kong SFC Finalises Regulation of Virtual Asset Trading Platforms

Hong Kong’s SFC finalised the regulatory requirements for centralised virtual asset trading platform operators providing trading in non-security tokens under the new VASP licensing regime under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) which took effect on 1 June 2023 with the publication of its Guidelines for Virtual Asset Trading Platform Operators (which apply equally to platform operators licensed to provide trading in security tokens under the Securities and Futures Ordinance) and Guideline on Anti-Money Laundering and Counter-Financing of Terrorist (For Licensed Corporations and SFC-licensed Virtual Asset Service Providers on 1 June 2023. With the implementation of the new licensing regime, all centralised virtual asset trading platform operators operating in Hong Kong, or actively marketing their services to the Hong Kong public, must be licensed by the SFC as a VASP under the AMLO and/or for regulated activities Type 1 (dealing in securities) and Type 7 (providing automated trading services) under the SFO. The SFC is recommending platforms and their staff to obtain licences under both Ordinances given the possibility of virtual assets’ classification changing from security tokens to non-security tokens and vice versa.

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