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Hong Kong has recently experienced the first cryptocurrency trading license foundation. A new virtual currency fund that buys and tracks Bitcoin prices has been established by Venture Smart Asia.
The financial industry of Hong Kong has been waiting for a long time for the fund on the HK stock market. Before that, it was the level of strictness in the regulatory framework that forced previous cryptocurrency funds to become offshore. Nevertheless, there are still opinions stating that the regulation should not be blamed. It was time the funds needed to create the systems they needed for cybersecurity and solid audit.
Naturally, Venture Smart Asia attracted the interest of many participants on the market. For those who would like to follow its example, it will be necessary to fulfill the SFC licensing conditions. Their goal is to lower risks related to virtual asset investing.
Hong Kong has listed the conditions for licensing:
If these criteria are violated, the regulator will consider them non-compliant and might take away the license from the manager. Additionally, due to the market being new, companies should expect that the Hong Kong officials could demand extra documents or a need to comply with the additional requirements before granting the license.
Not too long ago, the SFC informed cryptocurrency exchanges of Hong Kong that trading assets that could be viewed as securities and fall under the regulation are inadmissible. The majority of exchanges whether confirmed that they did trade assets of this category or ended their activity.
After all, it makes sense to regulate virtual assets strictly: they could only become recognized and trusted when supervised and managed properly.
In the upcoming years of 2020-2021, Hong Kong has plans on adjusting the requirements of crypto business regulation to match the conditions of the FATF. The legislative modifications are supposed to prepare Hong Kong to enter the worldwide cryptocurrency stage. The FATF recognized this legislation to be the first in Asia to comply with the rules of the global anti-money laundering organization.
The mentioned amendments will be relevant not only for cryptocurrency exchanges but also for money transfer service providers, too.
Many Asian countries have become attractive for cryptocurrency market exchanges thanks to the friendly regulation. If you are also someone who is interested in getting a trade license for cryptocurrencies in Asia, COREDO will help you meet all the requirements needed for the procedures. A legal consultation or advice from our specialists will help you feel more familiar with the Asian crypto assets’ market and answer all your questions.