Hong Kong’s Securities and Futures Commission (SFC) will begin accepting applications for crypto trading platform licenses on June 1, according to a May 23 announcement from the SFC.
The SFC stated operators of virtual asset trading platforms are invited to apply for a license if they are ready to follow the SFC's suggested rules in a statement on May 23.
The standards for virtual asset trading platforms will include asset custody security requirements, cybersecurity standards, and client asset segregation, among other things.
Stablecoins, a type of cryptocurrency whose value is tied to the value of other assets, were also suggested as an asset class that "should not be admitted for retail trading" until the jurisdiction's planned regulations for the asset class take effect.
According to the regulations, cryptocurrency exchanges must always maintain a minimum of 5,000,000 Hong Kong dollars ($640,00) in capital. They must also report their platform's available and required liquid capital, a list of their bank loans, advances, and credit facilities, as well as a profit and loss analysis, to the SFC at the end of each month. Tokens on authorized exchanges must have a 12-month "track record.
Even if a coin is already published on another platform, it must still go through due diligence requirements before being listed on an exchange. They will need to pass independent auditors' smart contract audits.
On May 17, the state-owned Chinese company Greenland applied for a virtual asset trading license in Hong Kong.
The SFC reportedly received 152 written submissions from the industry throughout the consultation period, per the release.