The Hong Kong Securities & Futures Professionals Association (HKSFPA) has cautioned that the city’s upcoming crypto licensing rules could force compliant firms to halt their operations if the rollout happens without a proper transition period.
The association explained that under the current plan, existing companies offering crypto-related services may be required to have full licenses from the first day the new rules take effect.
Without timely approval, they might be required to stop regulated activities while their applications are being processed.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
How Do KYC & AML Work in Crypto? (Explained)
The Securities and Futures Commission, in collaboration with the Financial Services and the Treasury Bureau, is currently seeking public feedback on new licensing regimes.
While the HKSFPA supports the government’s goal of stronger supervision, it warned that launching the framework without a transition phase could cause serious disruptions.
The group noted that the application process is complex and could easily result in backlogs.
In its consultation paper, the HKSFPA urged regulators to include a period for companies that submit their applications before the rules take effect. This would allow them to continue operating while their applications are under review.
The HKSFPA wrote, “Legitimate businesses may be forced to suspend operations while awaiting approval. We strongly urge the government to implement a 6 to 12-month deeming period for existing practitioners who submit their applications prior to the commencement date”.
Recently, the HKSFPA asked the government to adjust parts of its plan to apply new global crypto reporting standards from the OECD. What did the association say? Read the full story.
