The new regulation specifics directed at crypto exchanges and how they should run their services from now on. These rules, as expected, include checks and balances to curb the possibility of crime through know your customer (KYC) enforcement, as well as anti-money laundering requirements.
“A platform operator should comply with the KYC requirements which are applicable to a licensed corporation. It should take all reasonable steps to establish the true and full identity of each of its clients, and of each client’s financial situation, investment experience and investment objectives.”
In addition, the exchanges must employ third-party entities to run periodic audits of the service as well as compulsorily seek approval from the SFC if it is to change the features of products which already exist, or create new products for its customers.
Last month, Hong Kong also released rules for crypto fund managers.
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