Hong Kong licenses its first digital asset trading platform

The Hong Kong Securities and Futures Commission has granted its first virtual trading platform.

The platform is reserved for professionals, in line with recent SFC changes.

OSL Digital Securities has obtained the licence.

The Trust Project is an international consortium of media organisations based on transparency standards.

The Hong Kong Securities and Futures Commission (SFC) granted its first digital trading platform license on 16 December.

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However, SFC Hong Kong has not named the approved company.

Close monitoring
SFC announced that the platform’s licence allows the platform to serve professional investors. The licence comes with a set of restrictions. First, the platform will serve its clients under the close supervision of SFC. In addition, the regulator will present „tailor-made“ requirements. These restrictions are similar to those that the SFC applies to securities dealers and automated trading platforms.

The licence authorises the recipient to engage in two types of activities. The first, Type 1 activities, allows the firm to trade in securities. The second, Type 7, grants the right to engage in automated trading service activities.

The professional investor clause in the restrictions is part of a change of heart on the part of the regulator. As BeInCrypto previously reported, the Hong Kong crypto scene has so far been largely oriented towards the consumer market. The Hong Kong authorities are beginning to tighten access to crypto for investors with less than $8 million HDK (approximately $1 million).

More supervision in Hong Kong
The SFC also specifically mentioned that it was expanding its regulatory coverage. In November, the Hong Kong government proposed that the SFC regulate all centralized virtual asset exchanges. This expands the capabilities of the SFC. At present, platforms for exchanging between cryptomoney systems are not within the reach of the agencies.

BeInCrypto reported on the proposal on 3 November. Currently, market operators can exploit a loophole in the definition of „security“ to escape the control of SFCs. However, the changes in Hong Kong’s authority will not affect the market for security tokens.

Link to the Digital Yuan?
When the Hong Kong authorities announced the proposed regulatory changes, speculation quickly escalated. As such, some commentators saw the decision as putting an end to the flow of money from mainland China. Others saw it as paving the way for the introduction of the digital yuan. In this case, consumer enthusiasts would be pushed towards the digital yuan by eliminating competition.

Hong Kong winner revealed
In addition, OSL Digital Securities announced that it has received the SFC licence. OSL notes that with this licence, it becomes „the first SFC-certified, portfolio-based and Big-4 audited digital asset trading platform for institutions and professional investors“.

The exchange will allow professional investors to trade Bitcoin, Ethereum, as well as other „high quality“ corners and certain security token offerings (STOs).