Hong Kong virtual asset trading and custody services without a license can be sentenced to up to 7 years in prison

Odaily News According to Hong Kong Ming Pao, the Hong Kong Securities and Futures Commission and the Treasury Bureau have published 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 is proposed to require virtual asset service providers, whether small as virtual currency trading, withdrawals, and fiat currency exchange, or complex as brokerage activities and large transactions, to apply for a license from the Securities and Futures Commission, which is equivalent to bringing virtual asset over-the-counter (OTC) platforms under supervision, and the requirements are much stricter than the requirements for virtual asset OTC platforms to apply for a license from the Customs during last year's consultation. At the same time, the consultation document also mentioned that there is no transition period for the law to take effect or it is considered that the license has been obtained. Operators who do not meet the requirements must close down immediately. If they operate without a license, they may be fined up to 5 million yuan and imprisoned for 7 years.