Hong Kong - A New Phase in Virtual Asset Regulation
The Financial Services and the Treasury Bureau had issued the “Policy Statement on the Development of Virtual Assets in Hong Kong” in October 2022. After the announcement of the statement, the virtual asset market keeps developing rapidly and the Government needs to strengthen the regulations of virtual asset, especially due to the JPEX incident in 2023.
The Securities and Futures Commission (SFC) has established a licensing system and related regulatory requirements to regulate the virtual asset service providers.
Below are the general licensing requirements, corporations or individuals need to be licensed for:-
- Type 1 (dealing in securities) and Type 7 (providing automated trading services) regulated activities under section 116 of the SFO; and/or
- providing a VA service under section 53ZRK of the AMLO
Please be noted that sole proprietorship or partnership is not acceptable for the purposes of licensing.
Application procedures
- Submit application through common platform, WINGS or WINGS Mobile App
- A WINGS Mail message will be sent once the application is accepted
- Pay the required application fee, below table for reference:-
Type of application | Type of activity | Application fee |
Platform Operator | Types 1, 7 | $4,740 per RA |
Providing a VA service | $4,740 | |
Licensed Representative | Types 1, 7 | $1,790 per RA |
Providing a VA service | $1,790 | |
Approval to become responsible officer | Types 1, 7 | $2,950 per RA |
Providing a VA service | $2,950 |
The Government will also strengthen the regulations over come over-the-counter venues, like the physical shops and online platforms which are easily accessible to the general public.
A regulatory regime for stablecoin issuers set up with the Hong Kong Monetary Authority is under consultation. The proposed new system will require all qualified fiat-referenced stablecoin (FRS) issuers to obtain a licence, in order to manage the potential risks to monetary stability.
