Webinar | Hong Kong Regulation of Virtual Asset Trading Platforms | 8 October 2024

The webinar elaborated on Hong Kong's regulatory framework for virtual asset trading platforms, emphasizing its two licensing regimes under the AMLO and SFO. The speaker explained the comprehensive licensing requirements, which include submitting a consolidated application through the SFC's WINGS platform, meeting stringent eligibility criteria, and fulfilling continuous obligations like financial reporting and external assessments.

Hong Kong's regulatory efforts aim to align with FATF recommendations, protect investors, and support the city's ambition to be a global crypto hub. The AMLO regime, effective since June 2023, mandates licensing for platforms trading non-security virtual assets and subjects violators to severe penalties, including imprisonment and fines.The recent JPEX scandal, resulting in significant investor losses and arrests, highlighted the risks of trading on unlicensed platforms and underscored the need for strict regulation and enforcement against breaches.

The speaker described the SFC's proactive measures in response, such as issuing warnings about unlicensed entities and establishing a joint working group with police to investigate suspicious activities.The webinar stressed the importance of trading on fully licensed platforms, noting that only platforms like OSL and Hashkey are currently licensed, while others operate under deemed licensing awaiting approval.

Continuing professional training for responsible officers and licensed representatives is mandatory to ensure compliance, with a focus on risk management, client protection, and market integrity. Finally, the speaker concluded by emphasizing Hong Kong regulators' commitment to enforcing the virtual asset trading regulations, protecting investors, and enhancing public awareness through education initiatives and media campaigns.

#VirtualAssets #HongKongRegulations #CryptoTrading

Timecodes:
00:00 Introduction to Hong Kong's Virtual Asset Licensing Regime
01:52 Current State of Licensing Regimes
03:29 Regulatory Alignment and Future Prospects
05:18 Licensing Requirements and Regulatory Objectives
11:24 Expanded Licensing Scope and Exemptions
13:08 Technical and Operational Licensing Criteria
14:40 Compliance, Qualifications, and Management Standards
18:15 Roles, Responsibilities, and Corporate Governance
21:13 Senior Management Accountability and Core Functions
26:09 Application Process and External Assessment
30:45 Working with Financial Institutions and Sandbox Environment
32:19 Monthly Reporting and Activity Restrictions
35:36 Committee Structures and Asset Monitoring
39:02 Client Protection and Due Diligence Standards
43:59 Custody and Compensation Requirements
01:01:39 Compliance and Enforcement
01:10:02 SFC's Regulatory Lists and Warnings
01:11:53 Enhanced Oversight and Scandal Response
01:13:35 JPEX Case Study and Broader Implications
01:35:01 Conclusion and Investor Recommendations

Charltons Law Firm:
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Julia Charlton
https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/

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