SFC issues first license to digital asset trading platform

​Hong Kong's Securities and Futures Commission (SFC) announced that it has granted the first licence to a virtual asset trading platform in Hong Kong. The platform is licensed for Type 1 (dealing in securities) and Type 7 (providing automated trading services) regulated activities. As part of the licensing conditions, the licensee must only provide services to professional investors. 

The SFC is one of the first major jurisdictions to introduce a comprehensive framework for the regulation of virtual asset trading platforms and its approach is consistent with the recommendations of international standard-setting bodies. Regulators in other major markets have also announced plans to regulate virtual asset trading to address concerns about anti-money laundering and consumer protection.

"Our regulatory approach to virtual assets aims to protect investors while fostering the healthy and orderly development of this emerging industry," said Mr Ashley Alder, the SFC's Chief Executive Officer. "When licences are granted to those trading platforms which choose to be regulated, investors in Hong Kong will be able to easily distinguish between platforms which are properly regulated and those which are not."

The SFC will continue its efforts to provide a clear and well-defined regulatory environment for the development of the Fintech industry. In a consultation launched in November, the Government proposed a new legislative framework where the SFC would be able to regulate all centralised virtual asset exchanges, including those that only trade types of virtual assets which currently fall outside the SFC's jurisdiction.