Hong Kong Brokers Seek SFC Clearance Before Virtual Asset Trading Law


Companies that offer financial services in Hong Kong are reportedly already undertaking the preliminary preparations necessary to offer their goods and services to individual retail investors, as reported by the regional media.

It has been asserted that brokers and fund managers in the region have made inquiries about the essential help on the licensing requirements in preparation for the new regulations.

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance in Hong Kong was revised during the month of December 2022 by local legislators (AMLO). The legislature has given its approval to this change, which is in line with the existing attitude of the region regarding the broadening of opportunities for trading cryptocurrencies.

Because the amendment creates a new licensing structure for virtual asset service providers, it will now be possible for individual investors to participate in the trading of virtual assets as a direct result of the amendment. At current time, the buying and selling of digital assets is restricted to only experienced investors and traders who can demonstrate that they have at least one million dollars worth of bankable assets in their possession.

Victory Securities and Interactive Brokers were the first two brokers in Hong Kong to receive approval from the SFC to trade digital assets for the professional customers of their respective firms.

Consumers who are interested in trading Hong Kong-listed exchange-traded fund futures that are based on Bitcoin do not require a specialist license at this time in order for Hong Kong-based brokers to be able to provide services to those customers. However, businesses who want to offer trading in virtual assets will need additional authorisation from the SFC in order to do so.

The first of March of this year was supposed to mark the beginning of the implementation of the new licensing criteria.However, in order to provide businesses who provide services for virtual assets additional time to adequately prepare, the deadline has been pushed back to the 1st of June.

This comes as a direct outcome of the recent selection of Julia Leung to fill the position of chief executive officer at the SFC.She has already stated that she is in favor of tightening the stringency of the laws governing cryptocurrencies in the local area.


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Hong Kong is a Step Closer to Legalizing Retail Crypto Trading – Report

Hong Kong is truly making moves that can help define it as a thriving hub for all crypto-related activities within the region.


According to a report from Bloomberg citing unnamed sources, the City’s top financial regulator, the Securities and Financial Commission (SFC) is set to permit to relisting of Bitcoin (BTC) and Ethereum (ETH) in exchanges that permit retail traders.


The news that the Hong Kong SFC is considering a divergent crypto regulatory framework was first unveiled by Elizabeth Wong, Head of Fintech at the SFC as reported by Blockchain.News earlier this week. According to Wong, new allowances will be made for retail crypto traders, marking a move away from the earlier stance instituted in 2018 that sees only institutional traders with $1 million in capital trade the nascent asset class.


The timeline for announcing the new regulatory frameworks is yet unknown, however, speculations abound that the SFC will make its plans known at a fintech conference that is billed to start on Monday. Hong Kong has lost its luster as the preferred destination for most mainstream crypto companies and veterans.


With the new move, the city is looking to backtrack on its stance, thus creating an environment whereby it can compete with other countries including Singapore. With the speculation about the new crypto regime growing stronger, sentiments from stakeholders is still largely skeptical as many believe China’s influence might still be a drawback for the firm.


“The kind of conversations I’ve had was that people still fear there’ll be a very strict licensing regime,” said Leonhard Weese, co-founder of the Bitcoin Association of Hong Kong. “Even if they’re able to deal directly with retail users, they’re still not going to be as attractive or as competitive as overseas platforms.”


The crypto ecosystem is gaining massive traction with the UK Government making impressive strides to regulate the industry. The SFC as well as other promising nations are not slacking on this trend and are ready to do all they can to provide an enabling environment for all actors.

Image source: Shutterstock


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Regulator in Hong Kong Warns Users Against NFT Trading Risks

The Securities and Futures Commission (SFC) of Hong Kong has stepped up its awareness campaign and this time, it is in relation to the risks inherent in the trading of Non-Fungible Tokens (NFTs).


As announced by the regulator, the trading of NFTs has soared in recent times with more Hong Kong residents getting aboard the bandwagon. The commission is admonishing investors not to participate in the trading of digital collectables if they do not fully understand the associated risks therein.

“The Securities and Futures Commission (SFC) wishes to remind investors of the risks associated with investing in non-fungible tokens (NFTs), which have increased in popularity in recent years,” the announcement reads, “As with other virtual assets, NFTs are exposed to heightened risks, including illiquid secondary markets, volatility, opaque pricing, hacking, and fraud. Investors should be mindful of these risks, and if they cannot fully understand them and bear the potential losses, they should not invest in NFTs.”

The SFC noted that NFTs are growing in popularity in Hong Kong and there are a number of NFTs that purely represents the digital representation of an underlying asset and in which case, it has little role to play in the trading of those assets. However, the regulator said there are NFTs that are portrayed as securities and these types must be licensed before it is offered to residents.

“The majority of NFTs which the SFC has observed are intended to represent a unique copy of an underlying asset such as a digital image, artwork, music, or video. Generally, where an NFT is a genuine digital representation of a collectible, the activities related to it do not fall within the SFC’s regulatory remit,” it said adding, 

“However, the SFC has recently noted NFTs which cross the boundary between a collectable and a financial asset, for instance, fractionalised or fungible NFTs structured in a form similar to ‘securities,’” in which case is required to be authorized.

Non-Fungible Tokens are continually becoming a major source of concern to regulators as there are no frameworks that govern them even in countries where crypto regulations are quite developed.

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Huobi Tech Files to List Crypto ETF Product in Hong Kong

Retail investors with a capital base of at most HK$8 million (US$1 million) will soon be able to gain exposure to a crypto-based Exchange Traded Fund (ETF) product as the Huobi Tech asset management firm has reportedly filed for such a product with the Securities and Futures Commission (SFC).


Huobi Tech, an independent asset manager with no affiliation with the cryptocurrency trading outfit, Huobi Global, is riding on the recent allowance granted by Hong Kong authorities to extend the accessibility to regulated crypto ETF products beyond the reach of only professional traders or investors.

To get “all the trading and redemption done directly in Hong Kong … would give better protection to investors, as the fund will be regulated under Hong Kong law,” said Huobi Tech’s senior vice-president Romeo Wang, without commenting on Huobi’s application. “We will keep close and positive communications with regulators including the SFC” to “obtain the proper licences and approvals.”

The demand for related crypto products is growing at a fast pace the world over. The permission by the Hong Kong authorities to permit the trading of these unique ETF products is a sign that the government’s focus is essentially on powering the growth of these developing asset classes across the board. 

Cryptocurrencies are still considered relatively volatile and risky as an investment asset. Many regulators, including the United States Securities and Exchange Commission (SEC), have not approved a full-fledged spot Bitcoin ETF product, with a slew of rejections. 

Even though ProShares and VanEck are actively managing Bitcoin futures-based ETF as approved by the SEC, the more conservative investors are still awaiting a full-fledged Bitcoin or spot crypto ETF, a milestone that the SFC has proven to be well ahead of the US regulator per its recent disposition.

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Hong Kong Regulator SFC Warns ICOs as Unauthorized Investment Schemes

The Hong Kong Securities and Futures Commission (SFC) has issued a warning to the public in relation to market arrangements that woos investors dubbed Collective Investment Schemes (CIS).

According to the commission, these investment schemes ranges from real estate or non-conventional assets and offerings such as digital tokens and Initial Coin Offerings (ICO), whether they are offered by homegrown firms or foreign firms.

The advent of the coronavirus pandemic and its dragging impacts on the global financial ecosystem stirred the demand for investment options rather than bonds and other safer options. With interest rates touching 0% for most economies, investors sought alternatives in high paying offerings, especially in the digital currency world. The cryptocurrency ecosystem has become enticing to all, including Hong Kong residents, from token issuance through ICOs, Initial Decentralized Offerings (IDOs) or Initial Exchange Offerings (IEOs).

According to the SFC, no issuer or firm looking to offer any proscribed investment options without proper registration with the commission. In cases required also, licenses must also be obtained before offering such services to the public.

“Unauthorised investment arrangements are highly risky, and investors may lose all their investments,” said Ms Christina Choi, the SFC’s Executive Director of Investment Products. “Investors are urged to check the new alert list and find out whether the arrangement is authorised by the SFC before investing.”

Connecting digital currency investment activities to broad losses is not uncommon in today’s advanced digital ecosystem. For two years straight, Australia’s ScamWatch has often reported a sustained trend in which the citizens lose an enormous amount of funds to unregulated firms offering unapproved investments.

The latest report revealed that Australians lost a total of $70 million to crypto scams in the first half of 2021, with estimated more losses by year-end. This trend is one of the core scenarios the SFC seek to avoid.

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Digital Trading Platform OSL Gets License from Hong Kong Securities Regulator

CMCC Exchange now a Member of Hong Kong Cryptocurrency Union

CMCC Exchange now a Member of Hong Kong Cryptocurrency UnionOSL, a top digital asset trading platform in Asia has received licenses from Hong Kong’s Securities and Futures Commission (SFC). The firm is also looking to obtain a license from Singapore’s regulatory body. OSL Becomes SFC’s First Licensed Crypto Exchange Platform According to an official release on Tuesday (Dec. 15), the BC GTechnology Group member

Read MoreRead More. The post by Anthonia Isichei appeared first on BTCManager, Bitcoin, Blockchain & Cryptocurrency News


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