Hong Kong securities regulator to issue new license guidelines for VASPs

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As part of plans to attract global investors to its local ecosystem, Hong Kong’s Securities Futures Commission (SFC) has confirmed that it will be publishing new operational guidelines for licensing virtual asset service providers (VASPs).

SFC CEO Julia Leung disclosed in an interview that the Commission is keen on issuing the new guidelines in May. The rules are intended to govern the widely awaited licensing regime scheduled to take effect on June 1.

The biggest winner of the licensing regime appears to be retail investors, as they will be allowed to trade digital assets like BTC and Ethereum (ETH) after a lengthy ban. Leung revealed that the provisions in the incoming rulebook are designed to protect the interest of investors as the ecosystem reels from the collapses of several centralized entities.

“As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle,” said Leung.

The rules will serve as a handbook for VASPs interested in applying to the SFC for licensing. Local news outlets confirm that a handful of service providers have met the SFC’s criteria before the launch date.

The incoming rules place a premium on Anti-Money Laundering (AML) requirements and other disclosures relating to counter-financing of terrorism in an exhaustive 361-page document.

Ahead of the launch date, the government kickstarted a consultative process to seek the opinion of key industry players. Leung disclosed that the process recorded 150 responses drawn from digital asset service providers, academia, and members of the public.

Gunning to be the digital asset capital of the world

Hong Kong has publicly stated its desire to be the seat of Web3 activity in the world by revamping its regulatory framework and issuing a slew of incentives to the industry.

The initial impacts have been impressive, with nearly 90 firms jockeying to move their operations to the city drawn by the prospects of lower taxes and a $2 billion Web3 fund.

However, not all firms have faith in the region’s plans to be the Web3 capital of the world. Digital currency exchange Bitget recently announced that it would be pulling down the curtain on its operations in Hong Kong when the new licensing regime begins in June.

Watch: Service providers and digital assets