Cryptocurrencies are strongly affected and their value destroyed. However, while some continue to vigorously reject them, others are thinking of ways to control them in order to better exploit them. With this in mind, Hong Kong will finally introduce licenses for crypto platforms.
The Crypto Sector Aligns With The Financial Sector
With the fall in cryptocurrency markets, more and more investors are jumping ship. Meanwhile, stalwart negotiators are staying the course and pursuing their ambitions. However, this does not change the view of regulators who continue to believe that digital assets need regulation. the bitcoinlike many other cryptos, suffers the wrath of these organizations and it is the cryptographic platforms that suffer.
In view of the context, Hong Kong has finally passed new legislation to regulate the crypto industry. As a result, crypto service providers will be able to obtain a license to operate in the city. Amendments intended to regulate the crypto space in Hong Kong have been submitted to the Legislative Council of the Special Administrative Region of China. The Terrorist Financing and Anti-Money Laundering Bill 2022 is expected to pass two readings and become law.
The people behind this project place particular emphasis on transparency. This is why they believe that Virtual Asset Service Providers (VASPs) must obtain a license to operate in the cryptocurrency industry. Crypto businesses will therefore be recognized as a Hong Kong Financial Service Entity.
Thus, no crypto platform can operate without the approval of the regulators. However, they continue to see crypto assets as a permanent challenge and risk. Their instability calls into question the decision to be adopted. Investor protection can quickly get complicated in this case. Crypto platforms must therefore meet certain conditions in order to be able to operate with complete peace of mind.
Licenses for cryptographic platforms… but also requirements
Crypto platforms that want to obtain a license in Hong Kong must meet certain requirements. Indeed, members of the Legislative Council are still not sure if they trust cryptocurrencies. While recognizing their upside potential, the vulnerability of these assets is not to be taken lightly. Thus, crypto service providers wishing to operate in the territory must obtain a license from the Securities Futures Commission (SFC) of hong kong. The proposal takes several details into account. Among others, the recommendations of the Financial Action Task Force on Money Laundering (FATF). These are very important since it is this group that sets all the global standards in this area.
With the adoption of the new legislation, the operations of crypto platforms will be subject to the control of the SFC. Indeed, the organization will have to ensure that the VASPs observe the rules and respect the codes of the sector. As such, it will need to ensure that suppliers adopt appropriate listing and trading policies. But also, that they respect the disclosure and financial information procedures. But above all, the commission will also implement mechanisms to combat conflicts of interest and market manipulation.
Adoption of cryptocurrencies is uncertain, especially given the current market situation. While some investors who said they believed in the potential of digital assets are withdrawing, doubt is growing in the markets. However, Hong Kong is willing to take the risk as it has passed a new law aimed at regulating the sector. Cryptographic platforms will then be able to operate legally in the same way as the financial sector. However, the instability of cryptos could call everything into question.
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The world is changing and adaptation is the best weapon to survive in this undulating universe. As a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. In order to share my experience and make known a field that fascinates me, nothing better than writing informative and relaxed articles at the same time.
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Hong Kong: Finally licenses for crypto platforms!
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