According to sources, FX168 Financial News Agency (Europe) reported that Hong Kong is currently studying whether to allow the Securities and Futures Commission (SFC) and Customs and Excise Department (C&ED) to jointly participate in the regulation of over-the-counter (OTC) cryptocurrency trading services.
According to sources, the Hong Kong Securities and Futures Commission has sought the opinions of industry insiders on the implementation of a new licensing system for otc crypto trading services. The securities regulator will collaborate with Hong Kong Customs to regulate these companies. Because the discussions are being held privately, the source refused to reveal their name.
(Source: SCMP)
The planned regulation and licensing of otc trading, which was previously under the exclusive authority of Hong Kong Customs, facilitates direct and private large-scale crypto trading between parties.
Insiders have mentioned that the Hong Kong Securities and Futures Commission has also sought the opinions of relevant companies in recent months on the introduction of a new licensing system for crypto custody services. They indicated that discussions on these two licenses are still at an early stage and may change.
A representative of the Hong Kong Securities and Futures Commission stated on Wednesday, September 11th in a statement: "To promote the sustainable and responsible development of Hong Kong's virtual asset industry, the Hong Kong Securities and Futures Commission is working closely with the government and other regulatory authorities to create a robust, clear, and consistent regulatory environment in Hong Kong."
Looking back at 2023, investors lost over 1.7 billion Hong Kong dollars in crypto scams, and the Hong Kong authorities propose to impose a maximum of two years' imprisonment and a fine of 1 million Hong Kong dollars on individuals operating virtual asset trading businesses without a license.
The Hong Kong Treasury launched a public consultation in February as part of the effort to establish a licensing system for otc virtual asset trading services. The proposal defines otc trading services as those involving spot trading of virtual assets.
The key points of the proposed legislation are as follows:
1. Anyone who provides virtual asset and money spot trading services in Hong Kong in a business form must apply for a license from the Commissioner of Customs.
2. Covering all over-the-counter trading services for virtual assets, regardless of whether such services are provided through physical stores and/or other platforms.
3. Empowering the Commissioner of Customs to oversee the compliance of license holders in combating money laundering and terrorist financing, and enforcing the statutory and regulatory requirements of the new system; and providing transition arrangements for effective implementation of the regulatory system.
However, some industry insiders expressed concerns that including all OTC trading shops and online trading platforms under customs regulation may cause confusion, considering that the China Securities Regulatory Commission already regulates other areas of cryptocurrency investment, such as cryptocurrency exchanges and ETFs.