Hong Kong Crypto Investors Must Act by February 29 Deadline

Hong Kong’s Deadline for Crypto Users

The Securities and Futures Commission (SFC) of Hong Kong issued a notice, emphasizing the necessity for virtual asset investors to transact exclusively through licensed exchanges. This advisory precedes the impending deadline of February 29, by which all cryptocurrency exchanges in Hong Kong must either obtain or apply for a Virtual Asset Trading Platform (VATP) license.

The notice directs virtual asset investors who are uncertain about the regulatory status of their exchange platforms to consult the SFC's lists of virtual asset trading platforms. "Investors should check whether a VATP is on the ‘List of licensed virtual asset trading platforms’ or the ‘List of virtual asset trading platform applicants,'" the SFC stated.

The SFC formally licenses platforms on the former list, while those on the latter include VATPs operating in Hong Kong that have submitted license applications to the SFC on or before February 29, 2024. Investors are advised to check the regulatory status of a VATP regularly and, in any event, by March 1, 2024.

The SFC underscores that crypto investors currently using unlicensed platforms must close their accounts by May 31 or transfer their holdings to a licensed platform. However, the SFC also cautions the public that applications on the 'List of virtual asset trading platform applicants' are still under processing, and approval is not guaranteed. Thus, trading on these platforms carries inherent risks.

JPEX Fraud Pushing Regulations

The move to enforce regulations follows a notable incident last year when the SFC exposed JPEX, a cryptocurrency falsely claiming to await a Hong Kong crypto license. Designating JPEX as a fraud, the SFC revealed it as the perpetrator of a large-scale scam that victimized over 1,600 investors in Hong Kong, involving HK$1.2 billion in crypto assets. This incident, considered the largest crypto scam in the jurisdiction, prompted the SFC's commitment to transparency by publishing the names of locally licensed crypto platforms and those in the licensing application process.