A news report confirmed that the Government of Hong Kong is in the process of bringing amendments to existing crypto laws.
A fresh consultation piece compiled by Clara Chiu, Director of Hong Kong’s Securities & Futures Commission (SFC) had been published. In this consultation piece, Chiu had detailed that amendments will be brought into the laws relating to crypto trading platforms. Chiu informed this while he was addressing an audience gathered for attending the FinTech Week 2020 Conference held on Tuesday.
In his speech, Chiu also apprised that there is a dire need for SFC to make amendments in the regulatory structure. Amendments are required to bring trading platforms under extended regulatory framework who are conducting centralized virtual assets’ business in Hong Kong. Chiu also clarified the status of tokenized securities and cryptocurrencies. He said that irrespective of whether trading platforms provide services for tokenized securities or cryptocurrencies, both will be subjected to SFC’s regulation.
Earlier in the year 2019, SFC had made certain amendments in its regulatory rules and regulations. At that time crypto trading platforms were directed to treat anyone of their trading products as “securities”. Meaning thereby that the trading entity would need to obtain permission from SFC prior to offering the product for trading.
In the meanwhile, Ashley Alder, CEO of SFC, also explained in her speech the necessity of amending the law. She told that there is no restriction upon any trading platform who doesn’t want to come under SFC’s regulatory framework. She explained however that for doing so, the trading platforms would need to ensure that its trading products are not “securities”.
As per SFC’s law if a trading product falls under the definition of “securities” then SFC’s permission is necessary. Without such permission, the product cannot be allowed for trading. However, if the product is not “securities” then no prior permission is required from SFC for trading the product.
Chui also told that Hong Kong is a member of the Financial Action Task Force (FATF) alongwith other countries. As per regulations of FATF, SFC is required to ensure strict adherence to AML Standards and Policies within the country.
The new law will be passed and promulgated soon. It is said that this will considerably change existing regulatory structure for tokenized securities’ trading platforms operating within Hong Kong.