Hong Kong Securities Futures Commission to Release Cryptocurrency Exchange Licensing Guidelines Next Month
The Hong Kong Securities Futures Commission (SFC) is reportedly preparing to issue new licensing guidelines for cryptocurrency exchanges in May. This announcement was made by the SFC’s CEO, Julia Leung, on April 27, according to a report from Bloomberg.
These new guidelines are set to offer support to cryptocurrency trading platforms, which will enable them to offer their services to retail investors beginning on June 1. The consultation process for the licensing regime has received more than 150 responses from interested parties, according to Leung.
The SFC has previously stated that it will only license cryptocurrency exchanges that comply with Anti-Money Laundering (AML) and Know Your Client (KYC) regulatory requirements. These requirements were included in the February 20 report that Leung referenced during her recent announcement.
Some trading platforms have already begun offering cryptocurrency-related services to investors under the SFC’s supervision. However, the majority of prospective Virtual Asset Service Provider (VASP) licensees are still awaiting confirmation.
Hong Kong’s move towards regulating cryptocurrency exchanges comes amid a broader trend of increased regulation in the crypto space. Other countries, including the United States, have also been taking steps to regulate cryptocurrencies and bring them into the mainstream financial system.
While regulation may be seen by some as a potential threat to the decentralised nature of cryptocurrencies, many investors believe that it is necessary to legitimise the asset class and make it more attractive to institutional investors. With the introduction of these new guidelines, Hong Kong is taking a significant step towards making cryptocurrency trading a more mainstream activity for investors.
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