A recent declaration by Hong Kong’s securities regulator, virtual asset platforms will become beneficial and accessible to retail investors.
Virtual Assets Service Providers Extending Crypto Trading to Retail Investors
An announcement by the Hong Kong Securities and Futures Commission (SFC) showed that retail investors would soon enjoy licensed platform services. The May 23 statement by the regulator showed that virtual asset trading operators ready to adhere to the suggested rules are eligible for license application.
Cybersecurity standards, asset custody safe requirements, and the seclusion of customer assets are some rules for virtual asset trading platforms.
Julia Leung, SFC’s chief executive officer, claimed that providing vivid regulator expectations could be crucial in developing an innovative and responsible environment. He claimed that the region’s virtual asset regulatory framework embraces the rule of ‘similar business, similar risks, and similar rules.’ Besides, this principle seeks to manage major risks and offer strong protection to investors.
Statutory Support Necessary for Crypto Trading Allowing Retail Investment
Despite the regulations coming into effect in June 2023, the Securities and Futures Commission is yet to permit the provision of services to retail investors by virtual asset trading platforms. The announcement shows that the statutory agency would implement several interventions to protect retail investors. Examples entail proper governance, improved token due diligence, and suitability during the onboarding course.
The announcement revealed that currently, the SFC does not regulate most virtual asset trading platforms that the public access. It also showed that persons who do not intend to abide by the forthcoming rules should be ready to halt business operations in Hong Kong.
In early May, the chairperson of the FinTech Association of Hong Kong, Neil Tan, participated in an interview with the media and stated that the ability of the nation’s finance industry to access digital assets is an ordinary evolution. On May 17, Greenland, a state-owned Chinese organization, formally applied for a virtual asset trading license in the special administrative region.
Registered Crypto Exchanges Still Minimal
The decision by Hong Kong to lift the existing crypto ban has stimulated renewed interest by exchange providers. Recent scrutiny of the registration process reveals HashKey Pro joins OSL Exchange as satisfying the registration requirements outlined by the Securities and Futures Commission (SFC).
Huobi recently confirmed applying for the VASP license along with OKX, which promised to offer application-based services. Binance is yet to clarify whether it will register and offer services in strict compliance with the SFC directive. Binance shut its operations in 2017 following China’s outright ban on crypto-assets.
Meanwhile, First Digital Group is set to launch USD stablecoin (FDUSD) by June 1. It targets to leverage BNB and Ethereum networks. First Digital confirmed that it would utilize cash and cash equivalents to back the FDUSD as it explores exchanges for its listing.
The stablecoin issuer is identified as the First Digital Trust registered as stipulated by the Trust Ordinance in Hong Kong.
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