New licensing regime for virtual asset service providers (VASPs)
On 4 November 2020, the Hong Kong Financial Services and Treasury Bureau ("FSTB") has issued a public consultation for seeking views on legislative proposal to introduce a new licensing regime for virtual asset services providers whereby any person seeking to conduct the regulated business of virtual asset trading platforms in Hong Kong will be required to apply for a license.
Previously, Securities and Futures Commission ("SFC") has issued a position paper in November 2019 for licensing of VASPs (SFC type 1 & 7 license) under an opt-in scheme. It applies to platform which enable clients to trade virtual asset ("VAs") with securities features (e.g. security token). With the new proposal, the proposed regulations are meant to cover VASPs that trade non securities virtual assets as well (e.g. cryptocurrencies) under the Anti-Money Laundering Ordinance ("AMLO"). It is broadly welcomed by the market as it is seen as a big step to protect investors' interest and enable the healthy continuous development of a virtual asset sector in Hong Kong.
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