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 accordance with recent SFC changes.

OSL Digital Securities obtained the license.

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

However, SFC Hong Kong did not name the approved company.

Close monitoring

The SFC announced that the platform license allows the platform to serve professional investors. The license comes with a set of restrictions. First, the platform will serve its customers under the close supervision of the SFC. In addition, the regulator will present “tailor-made” requirements. These restrictions are similar to those that the SFC applies to stock brokers as well as automated trading platforms.

The license authorizes the recipient to engage in two types of activities. The first, type 1 activities, allows the company 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 mind on the part of the regulator. As BeInCrypto previously reported, Hong Kong’s crypto scene has so far been largely oriented towards the mainstream market. Hong Kong authorities are starting to tighten access to crypto for investors with less than $ 8 million HDK (around $ 1 million).

Even more supervision in Hong Kong

The SFC also mentioned specifically 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. Currently, cryptocurrency exchange platforms are not within the reach of agencies.

BeInCrypto reported on the proposal on November 3. Currently, market operators can exploit a loophole in the definition of “security” to evade SFC control. The changes in Hong Kong authority will not affect the security token market, however.

Link with the digital Yuan?

When Hong Kong officials announced the proposed regulatory changes, speculation quickly escalated. As such, some commentators saw the move as ending the flow of money from mainland China. Others saw it as a way to prepare the ground for the introduction of the digital yuan. In this case, consumer enthusiasts would be pushed towards the digital yuan by removing the competition.

Hong Kong winner revealed

In addition, OSL Digital Securities announced that it had received the SFC license. OSL notes that with this license, it becomes “the first SFC-certified Big-4 digital asset trading platform, provided by a digital asset portfolio and Big-4 audited for institutions and professional investors”.

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