Hong Kong SFC to Conduct On-Site Inspections of Crypto Platforms after Licensing Deadline
The Hong Kong Securities and Futures Commission (SFC) has announced that it will be conducting on-site inspections of local virtual asset trading platforms (VATPs) that have not yet completed their regulatory applications after the licensing deadline of June 1.
The SFC’s move comes as a reminder to crypto companies of their obligation to obtain licensing before the deadline, according to an official announcement.
After June 1, all local crypto trading platforms in Hong Kong must be licensed or “deemed-to-be-licensed” by the SFC.
Those who fall under the “deemed-to-be-licensed” category will operate under a short-term framework designed for crypto firms that were already operating in the region before the licensing regime was implemented.
Operating an unlicensed VATP in Hong Kong after the deadline will be considered a criminal offense, prompting the SFC to take action.
The commission stated that it would conduct on-site inspections in the coming months to ensure compliance with its regulatory requirements, with a particular focus on client asset safeguarding and Know Your Customer (KYC) processes.
The SFC strongly advised investors to only trade cryptocurrencies on platforms that are licensed by the commission.
It also warned companies seeking licenses not to actively market services or onboard new retail clients until they have obtained formal licensing.
Additionally, they were urged to prevent mainland Chinese residents from accessing their services.
In the lead-up to the licensing deadline, the number of crypto exchanges and companies seeking operational licenses in Hong Kong has steadily decreased.
Eleven crypto firms, including OKX and Huobi’s local arm, withdrew their applications prior to the deadline, leaving 18
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