As a seasoned researcher with a keen interest in the dynamic world of finance and technology, I find myself both intrigued and concerned by Hong Kong’s ambitions to become a crypto hub. The city’s Securities and Futures Commission seems to be taking a firm stance on ensuring compliance and security within the cryptocurrency exchange landscape.
In simple terms, the goal for Hong Kong to become a significant player in the cryptocurrency sector is encountering obstacles because over a dozen digital currency exchanges are having difficulties getting complete licenses due to regulatory issues.
It appears that cryptocurrency trading platforms in Hong Kong are encountering difficulties in obtaining complete licenses, as they strive to establish themselves within the city’s growing crypto sector, according to a Bloomberg article that quotes sources close to the situation.
11 “Deemed-to-be-licensed” exchanges in the city have allegedly shown substandard practices during inspections by the Securities and Futures Commission, causing concerns about their readiness to fulfill all licensing conditions. The probe uncovered that certain exchanges were excessively dependent on a limited number of executives for handling client asset custody, while others are not effectively safeguarding against cyber threats, according to the report.
It has been reported that the entities being investigated are allegedly known entities like Crypto.com, Bullish, along with regional trading platforms such as HKbitEX and PantherTrade.
To date, only OSL and HashKey have obtained complete licenses in Hong Kong, with the Securities and Futures Commission (SFC) planning to issue more licenses by the end of 2024. However, the licensing process has resulted in the withdrawal of 12 applications, which include those from Bybit, Huobi HK, and OKX.
Hong Kong scrutinizes regulation for crypto exchanges
The findings from the Securities and Futures Commission are becoming more apparent as they increase their vigilance in ensuring that cryptocurrency platforms strictly adhere to regulations. Their main concern is protecting customer funds and implementing strong ‘know-your-customer’ procedures.
Due to a recent scandal, JPEX, an unregistered cryptocurrency platform, is now under increased examination. The company stands accused of defrauding over 2,600 individuals out of more than $200 million. Previously, the Securities and Futures Commission (SFC) stated that JPEX and certain crypto influencers had made deceptive or misleading statements on social media, falsely implying that they had applied for a virtual asset trading platform license in Hong Kong, which was not true.
Nevertheless, it was pointed out by the regulatory body that JPEX had not actually submitted the required application, contrary to their claims of being a “legally licensed and acknowledged platform for mediating the trade of digital assets and virtual currencies.”
Read More
Sorry. No data so far.
2024-08-22 09:36