Hong Kong Launches New Regulatory Regime For Virtual Asset Trading Platform Operators

The Securities and Futures Commission of Hong Kong (SFC) recently announced the new regulatory and licensing requirements for virtual asset trading platform operators, outlining the finalized regulatory requirements and proposed transitional arrangements under the new licensing regime for centralized virtual asset trading platforms (VATPs). The new regime for VATP, which is to fill in the regulatory lacuna in the regulation of virtual asset trading, became effective on 1 June 2023.

Before the implementation of the new licensing regime, only centralised VATPs that offered trading services for security tokens were regulated by the SFC under the Securities and Futures Ordinance (Cap. 571) (SFO), and trading activities involving non-security tokens were not subject to the scrutiny of the SFC. With the introduction of the new licensing regime, trading of non-security tokens will now be regulated. The VATP regime will run concurrently with the SFO regime, which means