Unlicensed crypto activity in Hong Kong faces up to 7 years in prison

28th of August, 2023

By 29 February 2024, all virtual asset (VA) service providers registered in Hong Kong (Xiangyang) or advertising their VA services in the Hong Kong market must obtain a special license or cease operations. This requirement is enshrined in the AML Amendment Ordinance promulgated on 16.12.2022.

For companies established before June 1, 2023 and wishing to provide VA services for the first 12 months, there is a "transition" period - the application for a license must be submitted no later than February 29, 2024.

The application with accompanying documents for a crypto license is submitted to the Securities and Futures Commission of Hong Kong (SFC). The Commission reviews not only the applicant and its activities for compliance with the licensing requirements, but also the employees, the ultimate beneficiary.

At the moment, the "transition" period is not over, but the SFC periodically conducts inspections of the crypto market, during which cases of misinformation of VA consumers about the presence of licenses of crypto service providers are revealed. Such violation of the law entails financial, administrative and even criminal liability.

Tougher regulation of the crypto market is linked to the transformation of the digital economy, as a result of which the authorities plan to introduce a mandatory licensing regime for cryptocurrency businesses by 2024. 

Having a license to operate, keeping reports, complying with the regulator's rules - the urgency of these tasks is growing every day. Intelligent Solution Group lawyers are ready to accompany your business in such complex processes as: business registration, obtaining licenses, opening bank accounts, preparation and maintenance of tax and accounting reports, AML procedures - to make you feel comfortable on the way of your business growth.