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The Securities and Futures Commission (SFC) reminds industry participants and investors that the deadline of 29 February 2024 has passed for virtual asset trading platforms (VATPs) to submit licence applications to the SFC in order to continue operating in Hong Kong on or after 1 June 2024.
As a result, VATPs that are operating in Hong Kong but did not submit licence applications to the SFC by the 29 February 2024 deadline must close down their businesses in Hong Kong by 31 May 2024, pursuant to the transitional arrangements (Note 1).
These VATPs must obtain the requisite SFC licence in order to resume their business activities in Hong Kong, or actively market their virtual asset services to Hong Kong investors. It is a criminal offence to carry on any unlicensed activity.
At the same time, investors are urged to check the regulatory status of VATPs on the Lists of virtual asset trading platforms on the SFC’s website.
Investors dealing with VATPs operating in Hong Kong which are not on the “List of licensed virtual asset trading platforms” or on the “List of virtual asset trading platform applicants” are urged to close their accounts with these VATPs or transfer to SFC-licensed VATPs for trading virtual assets.
The SFC, however, reminds the public that the applications submitted by applicants on the “List of virtual asset trading platform applicants” are still being processed and they may – or may not – be approved. Hence, trading on these platforms carries a risk (Note 2).
That being the case, the SFC strongly urges investors to trade virtual assets only on SFC-licensed VATPs because they may leave themselves unprotected by trading on unlicensed platforms.
Notes:
- Under Schedule 3G to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), transitional arrangements up to 31 May 2024 are provided to allow sufficient time for VATPs which have been carrying on the business of operating a virtual asset exchange (virtual asset service) as defined under section 53ZR and Schedule 3B to the AMLO in Hong Kong before 1 June 2023 to apply for a licence or to prepare for an orderly close-down of their business operations in Hong Kong. Such VATPs must submit a licence application to the SFC by 29 February 2024 in order to continue operating in Hong Kong on or after 1 June 2024.
- The public should be aware that VATPs on the “List of virtual asset trading platform applicants” are not licensed or regulated by the SFC and they may not be in compliance with the SFC’s requirements. These VATPs may not eventually be granted licences as the SFC may refuse their applications. In such cases, these VATPs may be required to close down their businesses in Hong Kong and their names may be placed on the “List of closing-down virtual asset trading platforms”. Investors should thus also check the “List of closing-down virtual asset trading platforms” from time to time.
