10 Nov 2020
On 3 November 2020 the Financial Services and the Treasury Bureau issued a consultation paper to introduce a new licensing regime for virtual asset exchanges (VA exchanges).
This client briefing considers the proposals in more detail, including how they interact with the existing ‘opt-in’ regulatory regime for VA exchanges introduced by the Securities and Futures Commission in November 2019 (which is available to exchanges which offer trading of at least one virtual asset which falls within the definition of “security” under the Hong Kong securities legislation).
VA will not cover:
the proposals will also:
Conducting regulated VA activity without a VASP licence
HKD5,000,000 and imprisonment for 7 years, with HKD100,000 daily default fine for a continuing offence
Making of false, deceptive or misleading statement in connection with an application for grant of a licence
HKD1,000,00 and imprisonment for 2 years
Non-compliance with AML/CTF requirements
HKD1,000,000 and imprisonment for 2 years
Administrative sanctions include suspension or revocation of licence, reprimand, remedial order, pecuniary penalty (not exceeding HKD10,000,0000 or three times the profit gained/costs avoided, whichever is greater)
Fraudulent or reckless misrepresentation to induce another person to acquire or dispose of a VA
This material is provided for general information only. It does not constitute legal or other professional advice.
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