- Hong Kong units a 12-month transition for the brand new VAT licensing regime.
- TVAPs should show a major native presence beneath the brand new guidelines.
- Failure to adjust to the brand new laws could end in felony prosecution.
Hong Kong is tightening management over its Digital Asset Buying and selling Platforms (VATPs), getting ready for a 12-month transition part that started June 1, 2023. The brand new regulatory system is concentrated on combating cash laundering. cash and the financing of terrorism, in response to a round issued by the Hong Kong Securities and Futures Fee (SFC).
Current VATPs have till Might 31, 2024 to adapt to the brand new guidelines and should present a considerable presence within the area, with particular standards equivalent to a bodily workplace, native administration and important employees stationed in Hong Kong. The SFC, nevertheless, has made it clear that mere firm registration or fictitious operations won’t cross the eligibility check.
Platforms providing safety token buying and selling providers face totally different laws beneath the Securities and Futures Ordinance. These VATPs should purchase the suitable license earlier than operations can start. The SFC round, nevertheless, solely applies to platforms providing unsecured token buying and selling providers.
The round supplies leeway for VATPs already lively in Hong Kong earlier than the June 2023 deadline. These platforms can proceed to function throughout the transition interval with out breaching licensing laws, offered they’re endeavor to acquire the mandatory license.
New VATPs aiming to launch operations within the city-state will not be afforded the identical luxurious. They have to first acquire their license or face felony prices for unauthorized actions. This rule additionally applies to individuals performing regulated features for these platforms.
As a remaining lifeline, the SFC has put in place a “decisive association”, permitting VATPs and their proposed managers or representatives assembly sure situations to proceed their actions from June 1, 2024, whereas their license purposes are nonetheless pending. examination course.
Over the previous few months, Hong Kong has seen important developments within the crypto house, indicating the rising curiosity and adoption of digital belongings. An announcement by Finance Secretary Chen Maobo final week mirrored the federal government’s recognition of the potential of Web3 and digital belongings and its dedication to fostering accountable development within the sector.
