In a recent blog post, Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, emphasized the need for unlicensed virtual asset service providers (VASPs) to comply with regulatory requirements.
Hui outlined a deadline of February 29 for unlicensed VASPs to submit their license applications. Those not approved must cease operations by May 31, as per the directive from the Hong Kong government’s financial services department.
Recognizing that some VASPs were operating before the Securities and Futures Commission (SFC) established a licensing system, a transitional period has been granted for them to apply for a license.
Hui stressed the importance of compliance, stating that VASPs wishing to continue operations in Hong Kong must submit their license applications by the designated deadline. If existing service providers fail to meet the SFC’s requirements, they will receive a “no-deeming notice” and must cease operations within three months of receiving the notice.
With the deadline for license applications fast approaching, Hui highlighted that the SFC is gearing up for enforcement activities, including issuing notices to non-compliant service providers and intensifying publicity efforts.
Additionally, Hui cautioned investors about the risks associated with virtual assets, citing their volatility and lack of intrinsic value. He emphasized the importance of conducting thorough research and using platforms licensed by the SFC for virtual asset transactions.
Regarding over-the-counter (OTC) trading venues, Hui disclosed plans to regulate them, considering their involvement in certain fraud cases in 2023. A consultation on a proposed regulatory framework for OTC venues will be launched accordingly.
