Hong Kong’s virtual asset service provider (VASP) licensing system will come into effect on June 1 this year, and virtual asset trading platform operators will have to apply for a license. Wu Wenqian, a compliance partner of TKX Capital and a practicing lawyer of the Hong Kong High Court, analyzed that there are three main points for a virtual asset trading platform to obtain a Hong Kong license. The most difficult thing to obtain a license in Hong Kong is to recruit executives who meet regulatory requirements.
(Recap:Hong Kong Securities Regulatory Commission: 6/1 starts application for “virtual asset trading license”, excluding stable currency trading)
(background supplement:Focus!Hong Kong virtual asset trading platform, full text of key regulatory information)
fragrantThe Hong Kong Securities Regulatory Commission issued a consultation conclusion on the supervision of virtual asset trading platforms on the 23rd, and stated that the “Guidelines for Operators of Virtual Asset Trading Platforms” will come into effect on June 1 this year. The platform operator of the service must apply for a license from the Hong Kong Securities Regulatory Commission.
It should be noted that according to the latest guidelines of the Hong Kong Securities Regulatory Commission, the virtual asset trading platform currently operating in Hong Kong needs to submit an application within 9 months after June 1, and it can continue to operate after obtaining the approval of the Hong Kong Securities Regulatory Commission. Hong Kong operation.
According to the guidelines, virtual asset trading platforms need to meet multiple conditions such as investor protection, paid-up share capital, anti-money laundering, private key management, platform business scope, avoidance of conflicts of interest, and network security before they can obtain a license.
Further reading:Focus!Hong Kong virtual asset trading platform, full text of key regulatory information
3 main points to obtain a license
Wu Wenqian, a former legal and compliance partner of TKX Capital who worked for Huobi (now Huobi) and OKX Exchange, and a practicing lawyer of the Hong Kong High Court, told China Media Finance Association that the virtual asset trading platform needs to obtain a Hong Kong license , there are 3 main points:
- It is necessary to have a capital injection capital of not less than HK$5 million and maintain liquid assets of not less than 12 months of operating expenses
- Two Hong Kong local responsible officers (RO) are required to serve as the executive director of the virtual asset service provider (VASP), and these two ROs need to have 3 years of experience in the virtual asset industry, and other executives also need to conduct background checks for the Hong Kong Securities Regulatory Commission .
- Follow external assessment requirements, including governance and staffing, listing process, anti-money laundering process, market monitoring, etc.
And Wu Wenqian believes that the most difficult thing to obtain a virtual asset trading license in Hong Kong is to recruit executives who meet the regulatory requirements. He pointed out that Hong Kong attaches great importance to the compliance of the exchange, and it also has special requirements for the responsible director of the exchange. Have 3 years of industry experience, preferably a compliant exchange.
At present, only two virtual asset trading platforms have obtained the relevant licenses of virtual asset trading platforms issued by the Hong Kong Securities Regulatory Commission, namely HashKey PRO, which will be licensed in 2020, and OSL Exchange, which will be licensed in 2022.
Not yet approved to open retail services
On the other hand, whether Hong Kong will open retail investors to trade virtual assets has also attracted attention.
The Hong Kong Securities Regulatory Commission’s consultation conclusion on the 23rd pointed out that it will implement the proposal to allow licensed virtual asset trading platforms to provide services to retail investors, but the summary also reminds that the Securities Regulatory Commission has not yet approved any virtual asset trading platform to provide services to retail investors. services, and most of the existing virtual asset trading platforms that are accessible to the public are not regulated by the CSRC.
Gary Tiu, director of regulatory affairs at BC Technology Group, the parent company of the OSL trading platform, previously stated that Hong Kong’s laws and regulations on virtual assets are still being improved. At present, there is no real large-scale tokenization or digital financial products in the world. The products that can be provided to retail investors still need to communicate and research with the regulators.