In a solemn digital address, Hong Kong’s SFC warned against the devious activities of unlicensed virtual asset trading platforms, calling them out on criminal offenses. There have been alarming reports of certain trading firms falsely claiming that they have submitted applications for licenses, which allegedly, aren’t true.
Should these firms apply to operate within the legal bounds of Hong Kong, the SFC has pledged to consider these false claims as potential criminal offenses. A blatant disregard of the new requirements that came into effect as of June 1 under the SFC’s licensing regime, could result in serious legal repercussions.
Interestingly enough, some of these alleged crypto trading platforms are known to create new entities while claiming to have submitted applications to the SFC. Yet, the products and services offered often do not adhere to the various legal and regulatory requirements. Such established entities would be required to either apply for SFC licenses or terminate their business operations in Hong Kong, as operating an unlicensed entity is considered a criminal offense.
The SFC’s licensing regime includes an array of crypto firms such as HashKey and OSL that have received licenses, which legally allow the firms to offer a variety of crypto services to Hong Kong residents. This regime requires that crypto exchanges and service providers maintain safe custody of assets while complying with KYC, AML, and Combatting the Financing of Terrorism rules.
Conclusively, these actions by the SFC not only work towards the overall safety and legitimization of the digital asset market in Hong Kong, but also set a firm stance against malpractices. On one hand, it sets a high bar for exchanges aiming to operate in the region, while on the other, it provides an environment of trust and assurance for unknowing investors who might become prey to these unlicensed entities. This could possibly be seen as a major strategic shift for protection in this rapidly evolving crypto-era. However, the balancing act between enabling innovation and ensuring compliance continues to walk a fine line.
Source: Cointelegraph
