Hong Kong’s SFC finds deficiencies in some “deemed-to-be-licensed” crypto exchanges, risking their licensing status amid tightened regulations.
A Hong Kong regulator has expressed dissatisfaction with ongoing inspections of cryptocurrency exchanges waiting to be fully licensed in the region. Some applicants received initial approvals from the city’s regulator but are yet to be fully licensed, subject to total compliance with the Hong Kong Securities and Futures Commission’s (SFC) requirements.
During on-site scrutiny, the SFC found that a few crypto exchanges that are “deemed to be licensed” are not managing cybercrime risks appropriately. Others are excessively dependent on a handful of executives to supervise the custody of client assets, a Bloomberg report said, citing sources it did not identify.
Deemed-to-be-licensed applicants fall under a short-term framework designed for crypto firms operating in the region before the licensing regime was enacted.
