Overview of Hong Kong’s new crypto exchange framework

November 2018

Jointly published by Tiang & Partners and PwC Hong Kong, this article highlights the key features of the Hong Kong Securities and Futures Commission's conceptual framework for licensing and regulating virtual asset trading platforms released on 1 November 2018.

The Securities and Futures Commission (SFC) of Hong Kong has proposed a conceptual regulatory framework for cryptocurrency exchanges and is looking to work with these exchanges to explore how the conceptual framework could be turned into reality. This demonstrates the SFC's recognition of the cryptocurrency industry, but at the same time, poses regulatory challenges faced by the regulator and cryptocurrency exchanges. This paper looks to provide an overview of the conceptual framework and the challenges arising from regulating this new economy.