HK sets licensing requirement for crypto exchange

Foreign firms will need to obtain a license as a virtual asset services provider.

The Hong Kong government will require foreign incorporated companies to obtain a license as a virtual asset services provider (VASP) in Hong Kong, Secretary for Financial Services and the Treasury Christopher Hui said.

Hui said the government had just concluded consultation on the regulatory system for the emerging investment trend, using cryptocurrencies.

“Based on the feedback received, a change is introduced to allow foreign incorporated companies to also obtain a license as a virtual asset services provider in Hong Kong,” Hui said during the FinTech Forum at the StartmeupHK Festival.

In November, the government had issued a paper to consult the market on the licensing regime for VASPs in the City.

The regime sought to impose requirements that will protect investors, prohibit market manipulation, and protect the City against money laundering and terrorist financing.

“The Government sees both risks and opportunities from this new trend, and we are of the view that a proper regulatory system could facilitate development and at the same time protect investors and adhere to international regulatory standards,” he said.

“He believe the proposed regime will further facilitate development of the virtual assets industry in Hong Kong, leveraging our world-class regulatory framework,” he added.