Two months after consulting on the licensing of virtual asset trading and custody services in Hong Kong, there will be no transition period, and the maximum sentence for operating without a license is 7 years

Golden Finance reported that according to Hong Kong media Ming Pao, the Hong Kong Securities and Futures Commission and the Treasury have released a consultation document proposing to legislate a licensing system for digital asset (i.e. virtual asset) trading and custody service providers. The document mentions that it intends to require operators of virtual asset services, whether it is small transactions such as virtual currency trading, withdrawals, or fiat currency exchange, or complex transactions such as brokerage activities and large transactions, to apply for a license from the Securities and Futures Commission. This is equivalent to bringing over-the-counter (OTC) virtual asset trading platforms under regulation, and the requirements are much stricter than the requirements for OTC virtual asset platforms to apply for licenses from customs during last year's consultation. At the same time, the consultation document also mentioned that there is no transitional period for the law to take effect or practices that are considered licensed. Operators who do not comply with the regulations must immediately close down. If they operate without a license, they can be fined up to 5 million yuan and imprisoned for 7 years.