As a seasoned analyst with over two decades of experience in the financial industry, I have seen countless regulatory bodies adapt to new asset classes and technologies. The recent move by the Hong Kong Securities and Futures Commission (SFC) to approve four more virtual asset trading platforms (VATPs) is indeed a significant step forward in the region’s digital asset ecosystem.
The Hong Kong Securities and Futures Commission (SFC) has increased the number of authorized virtual asset trading platforms (VATPs) by four, bringing the total to more than double the initial count.
A rigorous licensing process
On December 18th, Accumulus GBA Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology (BVI) received their licenses. These companies have now joined HashKey, OSL, and HKVAX. As per an announcement by the Securities and Futures Commission (SFC), these new exchanges were approved under the SFC’s expedited licensing process for Virtual Asset Trading Platform (VATP) applicants deemed to be eligible for a license.
The recently sanctioned trading platforms have undergone physical assessments and addressed comments from the Securities and Futures Commission (SFC). These evaluations primarily focused on protecting clients’ resources, verifying customer identities, and ensuring cybersecurity. SFC Intermediaries Executive Director Eric Yip stated:
“We have been proactively engaging with VATPs’ senior management and ultimate controllers which helps drive home our expected regulatory standards and expedite our licensing process for VATPs.”
As an analyst, I aim to find a harmonious approach that ensures the protection of investor rights while simultaneously fostering ongoing growth within the digital asset industry, as emphasized by Yip.
The transactions will function within limited boundaries, requiring them to undergo security evaluations and intrusion tests by an impartial external entity whose results meet certain standards, prior to the lifting of these restrictions. The Securities and Futures Commission (SFC) will oversee this process, having outlined their expectations in a circular published on December 18th.
All of the approved VATPs are licensed for dealing in securities, providing automated trading services and operating a VATP.
More exchanges likely to be approved
Out of the total applicant pool, eleven Virtual Asset Service Providers (VASPs) are still under consideration. Among these, seven have been considered as already licensed. This status means that their operations comply with Hong Kong’s regulations against Money Laundering and Terrorist Financing.
On the SFC’s webpage, a message box pops up, advising users to engage in trading activities solely on authorized platforms. However, it should be noted that transactions can also occur with exchanges that are considered ‘licensed.’
In an interview with a local news source back in October, CEO Julia Leung of the Securities and Futures Commission revealed that they would be issuing new licenses in groups, following their strategic plan spanning from 2021 to 2026. The objective of this roadmap is threefold: to refine regulation, stimulate the tokenization of real-world assets, and delve deeper into blockchain technology exploration.
In Hong Kong, you can buy just four types of digital currencies: Bitcoin, Ether, Avalanche, and Chainlink. Legal trading of these cryptocurrencies for retail purposes became effective starting from August 2023.
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2024-12-18 20:43