Hong Kong’s Securities and Futures Commission (SFC) has issued a stern warning to crypto exchanges to apply for a virtual asset trading platform (VATP) license by February 29 or face closure by May 31. The SFC’s warning came on February 5, as Hong Kong continues its efforts to establish itself as a crypto hub while also cracking down on illegal activities in the industry. The regulator has pledged to improve public awareness of crypto and investment scams to protect investors.
To date, only two crypto exchanges in Hong Kong have received approval to offer services to retail investors: OSL and HashKey Exchange. Fourteen firms have applied for licensing, but their applications are still being processed. Exchanges that fail to apply for a license or that are found to be operating illegally face the prospect of being shut down.
The SFC urged investors to check if the platforms they use have applied for a VATP license. Exchanges that have not applied for a license are advised to close their accounts or transfer to SFC-licensed VATPs before May 31, 2024. The regulator cautioned that using crypto exchanges that have not been approved carries a risk, as an application does not guarantee approval. The SFC strongly encourages investors to trade virtual assets only on SFC-licensed VATPs to protect themselves.
The warning comes amid ongoing investigations into several platforms in Hong Kong, including crypto exchange JPEX, and 12 other platforms that are listed as suspicious on the website.