Hong Kong government issued a consultation to implement a new regulatory framework requiring virtual asset exchanges to be regulated by the SFC -
..The Hong Kong Financial Services and the Treasury Bureau (FSTB) has issued a consultation paper outlining a new regulatory framework that will bring operators of virtual asset exchanges within the formal regulatory perimeter of the Securities and Futures Commission (SFC) for the first time.
..The new regulatory framework implements the Hong Kong Financial Action Task Force’s (FATF) requirement to regulate virtual asset service providers for anti-money laundering and counter-terrorist financing purposes.
..The new regulatory framework requires centralised virtual asset exchanges that operate in Hong Kong or actively market their virtual asset services to the public of Hong Kong to be licensed by the SFC.
..Under the new regulatory framework, licensed virtual asset exchanges will be subject to similar regulatory requirements to those that apply to virtual asset exchanges trading in securities (i.e., security tokens), in particular, virtual asset exchanges will only be permitted to offer services to customers that qualify as professional investors.
..The consultation period runs until 31 January 2021 and a bill to bring the new regime into effect will likely be introduced to Hong Kong’s Legislative Council in 2021.
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