All VATPs operating in Hong Kong must be either licensed by the SFC, or “deemed-to-be-licensed” VATP applicants under the AMLO. It is a criminal offence to operate a VATP in Hong Kong in breach of the AMLO.

In the notice urging investors to check regulatory status of virtual asset trading platforms, the SFC also reminded investors to trade only on approved platforms, saying "the SFC strongly urges investors to trade virtual assets ONLY on SFC-licensed VATPs because they may leave themselves unprotected by trading on unlicensed platforms."

The SFC also said investors dealing with unlicensed VATPs should make preparations before 31 May 2024 to close their accounts or transfer to a SFC-licensed VATP..

The updated circular:

• clearly specifies the requirements applicable to intermediaries when they distribute VA-related products; and
• sets out the standards of conduct expected of intermediaries when distributing VA funds authorised by the SFC.

This circular will supersede the joint circulars on intermediaries’ VA-related activities issued on 20 October 2023 and 28 January 2022.

The SFC and the HKMA have reviewed their existing policy provided for intermediaries which wish to engage in virtual asset-related activities. The policy is updated in light of the latest market developments and enquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards. F

This updated circular replaces the 28 January 2022 joint circular on intermediaries’ virtual asset-related activities.

The working group comprises representatives from the Hong Kong Police Force's Commercial Crime Bureau, Cyber Security and Technology Crime Bureau and Financial Intelligence and Investigations Bureau and the SFC’s Enforcement Division and Intermediaries Division.

The working group is set up to:

• facilitate the sharing of information on suspicious activities and breaches of VATPs;
• implement a mechanism to assess the risks of suspicious VATPs; and
• enhance coordination and collaboration in related investigations. 

The Commission is putting in place the following measures:   

1.     The publication of VATP lists to ensure that information is disseminated in a clear, transparent and timely manner. These include:

         a)    a “List of licensed VATPs”;

         b)    a “List of closing-down VATPs” setting out the names of VATPs required by law to close down within a specified period;

         c)    a “List of deemed licensed VATPs” consisting of the names of VATPs which are deemed to be licensed as of 1 June 2024;

         d)    in light of public demand, a list of VATP applicants.

2.    To help the public more easily identify suspicious VATPs doing business in Hong Kong, the Commission will enhance and issue a dedicated list of suspicious VATPs on its website. The Commission will also consider providing more information about these VATPs to alert investors at an earlier stage. Again, this is to ensure that information will be disseminated in a clear, transparent and timely manner. 

3.    The SFC and the IFEC will be launching a public campaign to raise awareness in guarding against fraud, and will further enhance investor education by various means such as mass media, social media and education talks, facilitating the public’s understanding of the risks associated with virtual assets and potential fraud. 

4.    The SFC will, within its statutory powers, continue to strengthen its intelligence gathering process towards different businesses related to virtual assets. It will continue to take follow-up and enforcement actions against suspicious VATPs that may have violated the law, and refer cases to the Police when necessary.