Get ready, Hong Kong! Starting June 1st, anyone can buy and sell major cryptocurrencies like Bitcoin and Ether. This is all thanks to the new rules set by Hong Kong’s Securities and Futures Commission (SFC).
Green light for licensed exchanges
The SFC is the big boss of financial rules in Hong Kong. They’ve just given the green light for licensed exchanges to sell cryptocurrencies to everyone, not just the big guys. This is a big step for Hong Kong, as it wants to become a major player in the world of virtual assets, or Web3.
But what if a platform doesn’t want to get a license? Well, the SFC says they should pack up and leave Hong Kong. They also mentioned that no platforms have been approved yet, but they expect this to change in the second half of this year.
Starting next month, it will be against the law to advertise unlicensed cryptocurrency exchanges. This includes influencers who promote these platforms. Also, anyone who tricks another person into buying virtual assets will be breaking the law.
Strict rules for crypto exchanges
Even though Hong Kong is opening the doors to digital assets, they’re also putting safety measures in place. They want to avoid disasters like the bankruptcy of FTX, a big cryptocurrency exchange that went bust last year.
Eddie Yue Wai-man, the head honcho of the Hong Kong Monetary Authority (HKMA), said at a recent event that the rules will be strict. He said they want to let the industry grow and bring excitement to Hong Kong, but they won’t go easy on the rules.
Licensed platforms in Hong Kong will have to meet a bunch of requirements. These include keeping assets safe, avoiding conflicts of interest, and having strong cybersecurity. They’ll also have to check if investors understand the risks of virtual assets and set up limits on how much they can buy.
These platforms will also need to have a committee to decide which cryptocurrency tokens they offer. The tokens they offer to everyone should be included in at least two reliable indices from independent providers. One of these providers should have experience in traditional finance, the SFC says.
So, get ready for a new era of crypto in Hong Kong. It’s going to be an exciting ride!