OSL Exchange announced that it has obtained a virtual asset license issued by the Hong Kong Securities Regulatory Commission to provide professional investors with cryptocurrency trading services such as Bitcoin and Ethereum.
Original title: “Hong Kong issued the first cryptocurrency license limited to more than 8 million professional investors, will Beijing refer to it?”
Author: Wu said blockchain
On December 15th, the OSL Exchange under the BC Technology Group (863.HK) announced that it has obtained the first virtual asset license issued by the Hong Kong Securities and Futures Commission. The license types are Type 1 securities trading and Type 7 to provide automated trading services. This means that Hong Kong issued the first cryptocurrency license.
As of August 2020, the Hong Kong Securities Regulatory Commission has agreed in principle to issue licenses to OSL Digital Securities. OSL stated that in addition to the Hong Kong license, OSL has formally applied for a digital asset license from the Monetary Authority of Singapore in accordance with Singapore’s Payment Services Act.
The Hong Kong Securities Regulatory Commission clearly stated in the “Position Letter” issued on November 6, 2019 that if a digital asset online trading platform provides at least one type of security token transaction on the platform, it falls within the jurisdiction of the Securities Regulatory Commission and requires Type 1 (securities trading) and type 7 (providing automated trading services) regulated activity licenses.
The first type of regulated activity is securities trading, which mainly involves providing customers with the trading/brokerage services of stocks and stock options; buying and selling bonds for customers; buying/selling mutual funds and unit trust funds alloting and underwriting securities for customers. Usually securities companies and investment consulting companies will hold this license. The seventh type of regulated activity is the provision of automated trading services and the establishment of an electronic trading platform for matching customer orders. To apply for the No. 1 and No. 7 licenses, two or more agency leaders are required, with relevant industry qualification certificates or equivalent experience; the main body of the company must be a Hong Kong company or a foreign company registered in Hong Kong, with corresponding directors and Responsible personnel, etc.
OSL emphasizes that after the platform is officially launched, customers can trade high-quality cryptocurrencies through OSL’s secure and compliance platform, including Bitcoin (BTC), Ethereum (ETH), and strictly screened security tokens (STOs) . OSL emphasizes that customers need to pass strict KYC and anti-money laundering compliance procedures; to prevent market misconduct, OSL will use market monitoring, transaction monitoring and other prevention and control measures for digital assets.
However, the OSL license cannot provide services to retail investors, and can only be used for professional investors or institutions, with personal assets no less than 8 million Hong Kong dollars and institutional assets no less than 40 million Hong Kong dollars. If you are an investor from Mainland China, you not only need to meet the above requirements, but also need to have a Hong Kong bank account and can only trade in Hong Kong dollars.
According to Hong Kong law, professional investors refer to 1. Trust corporations entrusted to manage assets of no less than HK$40 million or equivalent in foreign currencies; 2. Individuals who have a total investment portfolio of no less than HK$8 million or equivalent in foreign currencies; 3. A corporation or partnership with an investment portfolio of no less than HK$8 million or equivalent foreign currency or assets of no less than HK$40 million or equivalent foreign currency; 4. The only business is holding investments and being an individual professional investor A wholly-owned corporation.
Unlike Japan and Singapore, Hong Kong still does not have a legal system specific to the virtual asset industry. Instead, it issues corresponding licenses within the framework of virtual assets to companies applying for virtual asset licenses on the basis of existing financial service licenses.
Hong Kong’s virtual asset regulatory framework has the following characteristics:
Licensed platforms can only open trading for professional investors
Support the issuance of security tokens
Legal currency and virtual assets must be stored separately, and customers’ hot and cold wallets must be covered by insurance
Customers can use the investor protection mechanism under the traditional financial system, and they can also enjoy the special protection measures introduced by the Hong Kong Securities Regulatory Commission for virtual assets
Have strict KYC / anti-money laundering procedures
Huobi (1611.HK) and OKEx (1499.HK) also announced the progress of applying for licenses and related certificates in Hong Kong on the HKEx Disclosure website, but Huobi and OKEx have obtained licenses within the traditional financial framework. And certificates, rather than licenses within the regulatory framework of virtual assets, means that it cannot start the virtual asset trading platform business.
Huobi announced in August that its Huobi Wallet has obtained a trust or company service provider license, and Huobi Asset Management has obtained a Type 4 (advising on securities) and Type 9 (asset management) regulated activity licenses; OKEx In June, it was announced that its subsidiaries obtained the Hong Kong Trust Company Registration Certificate.
Wu said that the blockchain has previously pointed out that if Huobi and OKEx are mainly engaged in retail business, if they decide to accept the supervision of Hong Kong’s virtual asset framework, they will need to make great strategic adjustments. At least institutions applying for licenses in Hong Kong need to give up the fat of retail investors. .
It is worth noting that just five days ago, on December 10, Singapore’s second largest sovereign wealth fund, Temasek Holdings, DBS Bank announced that it would launch a cryptocurrency exchange, offering four legal currencies (Singapore dollar, US dollar, Hong Kong dollar) , Japanese Yen) and the four most mature cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash and Ripple). At the same time, the exchange will also provide cryptocurrency custody services. On December 11, BC Group announced a service agreement with DBS Bank to provide certain technical services to DBS Bank.
The executive director of BC Group is known as the “Hong Kong Shell King” Gao Zhenshun. According to New Fortune, there are rumors that the “Fujian Gang” financial expert born in 1951 was originally just a “little tailor” in Tsim Sha Tsui, Hong Kong. Later, he switched to foreign exchange. With his outstanding financial skills, he turned into a financial talent. He has accumulated a lot of wealth and has cooperated with Ma Yun, Huang Guangyu, Xu Zheng, Ning Hao, etc. Reference ” Hong Kong Shell King “
Beijing and Hong Kong’s financial industry have always had close communication. For example, before the launch of the Science and Technology Innovation Board, they also referred to the reforms of the Hong Kong Stock Exchange. Earlier, central bank officials revealed that they are considering writing 1CO into the securities law. The central bank law recently reiterated the prohibition of currency issuance, but it also leaves room for virtual commodity trading such as Bitcoin. Whether Beijing will refer to Hong Kong’s actions in the future is more worth looking forward to.
