Hong Kong’s Securities and Futures Commission (SFC) announced on Wednesday that it plans to release a licensing framework for cryptocurrency exchanges, including Bitcoin, in May.
The new framework aims to regulate cryptocurrency trading platforms that operate in Hong Kong, and will require them to obtain a license from the SFC in order to continue operating. The license will be mandatory for all cryptocurrency exchanges that want to serve customers in Hong Kong, regardless of whether they are based in the city or overseas.
The move comes amid growing concerns about the potential risks associated with cryptocurrency trading, including market manipulation, money laundering, and fraud. The SFC has previously warned investors about the risks of investing in cryptocurrencies and has taken action against several unlicensed cryptocurrency exchanges operating in Hong Kong.
According to Ashley Alder, the SFC’s chief executive, the new licensing framework will provide greater clarity and transparency for investors and help to protect them from potential risks. “The SFC has been closely monitoring developments in the cryptocurrency and digital asset space and is exploring ways to enhance investor protection,” Alder said in a statement.
The new framework is expected to include guidelines on anti-money laundering and know-your-customer (KYC) procedures, as well as measures to prevent market manipulation and ensure the security of customer assets.
The announcement was welcomed by the cryptocurrency industry in Hong Kong, with many operators saying they are willing to comply with the new regulations. “We are committed to working with the SFC to ensure that our platform operates in compliance with all applicable regulations,” said a spokesperson for one of the leading cryptocurrency exchanges in Hong Kong.
The SFC has also indicated that it will continue to closely monitor the cryptocurrency industry and may introduce additional regulations in the future if necessary.