The Crypto Roundup: 24 May 2023 | CryptoCompare.com

The Securities and Futures Commission (SFC) of Hong Kong revealed in an announcement on Tuesday that it would begin accepting license applications for cryptocurrency trading platforms starting from June 1.

In a report on policy consultation published on the same day, the regulator stated that licensed digital asset providers would be permitted to cater to retail investors, as long as operators evaluate their understanding of the inherent risks.

As part of the proposed rules stablecoins “should not be admitted for retail trading” until intended regulations for the asset class are implemented. The new regulations also expressly prohibit crypto “gifts”, which are incentives for retail customers to invest, likely referring to airdrops.

Under the new framework, crypto exchanges must at all times hold no less than 5,000,000 Hong Kong dollars ($640,000) in capital.

They are also required to submit a monthly report to the SFC containing details of their available and required liquid capital, a summary of bank loans, advances, and credit facilities, along with a profit and loss analysis, while approved tokens on regulated exchanges need a 12-month track record.

All tokens to be listed on exchanges must undergo a rigorous due diligence procedure, even if they have been previously listed on another platform, and independent assessors will perform audits on smart contracts.

On implementing the Financial Action Task Force’s (FATF) travel rule for sharing crypto transaction information between financial institutions, the SFC agreed to accept submissions as soon as feasible after the transfer of the virtual asset until January 1, 2024, if the required information isn’t immediately provided to the beneficiary institution.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/may/24/