Key takeaways
A Hong Kong regulator has revealed that DeFi projects could be subject to regulatory requirements.
The SFC said DeFi activities fall within the scope of the Securities and Futures Ordinance.
Hong Kong’s new licensing regime for digital asset trading platforms takes effect in June 2023
DeFi projects could face regulatory requirements in Hong Kong
Keith Choy, interim head of intermediaries at Hong Kong’s Securities and Futures Commission (SFC), revealed on Wednesday, April 12th, that decentralised finance (DeFi) projects could face licencing requirements and regulation in the country.&
According to the SFC, DeFi activities fall within the scope of the Securities and Futures Ordinance and will be subject to the same regulatory requirements as traditional finance (TradFi).&
Choy mentioned this while speaking at the Web3 Festival in Hong Kong. This latest cryptocurrency news comes after the United States and France recently published reports on DeFi regulation.&
Choy’s speech doesn’t come as a surprise, as the SFC has previously pointed out that the DeFi ecosystem is in need of regulation. However, the regulatory agency is yet to lay out its plans on how to properly regulate the ecosystem. Choy said;
“Providing automated trading services is a regulated activity under the SFO. If a decentralized platform allows trading in virtual assets, which constitutes securities or futures as defined under the SFO, the platform and operators are required to have a Type 7 license.”
Collective investment schemes also need authorisation
The SFC pointed out that authorisation requirements are also necessary when companies wish to offer a collective investment scheme to the public in Hong Kong
According to Choy, DeFi presents regulatory agencies with issues, including financial stability and limited transparency, resulting from a lack of data and unregulated firms and activities.&
He also discussed market integrity issues like price oracle manipulation, front-running transactions and investor protection concerns.
Hong Kong is one of the leading crypto hubs in the world. In February,& Interactive Brokers launched its crypto trading services in Hong Kong.&
Hong Kong’s new licensing regime for digital asset trading platforms is set to come into effect in June 2023.
The post DeFi projects could face regulatory requirements, says Hong Kong regulator appeared first on CoinJournal.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments