The Hong Kong Securities and Futures Commission (SFC) has stepped up its inspection process for virtual asset trading platforms. According to SFC CEO Leung Fung-yee, the first-stage inspection of the platforms has been completed and the identified deficiencies have been communicated to the relevant platforms. These platforms are required to address the specified deficiencies; those who successfully pass the inspections will receive a conditional license, while those who fail to meet the requirements will be forced to cease operations.
The SFC introduced a new licensing regulation for virtual asset trading platforms in June last year. Under this regulation, platforms were granted temporary licenses, but this period expired at the end of May 2023 and inspections began. Leung stated that many deficiencies were identified during the first inspection phase and these deficiencies were reported to the platforms.
Platforms are required to submit a remediation plan to the SFC to address their deficiencies. In addition, the new phase will also set a specific deadline; platforms that fail to meet the requirements within this period will lose their provisional licenses and must cease operations in Hong Kong.
According to the SFC’s website, the 11 platforms with provisional licenses include HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, Bullish, Crypto.com, WhaleFin and Matrixport HK. These platforms will be granted conditional licenses if they meet the standards set by the SFC by addressing their deficiencies.
In addition to regulations on the virtual asset market, Leung also warned investors about platforms that concentrate on the stock market. These warnings are intended to protect investors' interests; in particular, it was noted that the SFC issued warnings about stock concentrations six times between June and September, and this situation occurred more frequently than in previous periods.