- Hong Kong’s evolving regulatory landscape for virtual assets.
- SlowMist’s contributions to enhancing cryptocurrency security in the region.
- The importance of compliance in the growing virtual asset industry.
Hong Kong: SlowMist, a blockchain firm, has conducted security audits for HashKey Pro Exchange and other cryptocurrency platforms in response to the evolving regulatory landscape.
During the 2019 Fintech Week, the Hong Kong Securities and Futures Commission (HKSFC) demonstrated a strict approach to cryptocurrency regulation with publications such as “Position Paper: Regulation of Virtual Asset Trading Platforms” and “Warning on Virtual Asset Futures Contracts,” emphasizing the need for stringent licensing and professional investor services.
However, on October 31, 2022, during the Hong Kong Fintech Week, the Hong Kong Special Administrative Region government unveiled its policy stance and guidelines for fostering a thriving virtual asset industry. This was articulated through the “Policy Statement on the Development of Virtual Assets in Hong Kong,” solidifying its aspiration to become a global hub for virtual assets.
On May 23, 2023, the HKSFC released its “Consultation Conclusions on Proposed Regulatory Framework for Licensed Virtual Asset Trading Platform Operators,” which received 152 submissions from various industry stakeholders. The feedback overwhelmingly supported the proposed regulatory framework, prompting HKSFC to introduce “Guidelines for Virtual Asset Trading Platforms” and “Anti-Money Laundering Guidelines” with certain adjustments and clarifications effective from June 1.
Starting from June 1, 2023, retail investors are expected to purchase cryptocurrencies, including Bitcoin, on licensed and compliant trading platforms in Hong Kong.
Two cryptocurrency firms have already obtained licenses for compliant trading within Hong Kong: BC Technology’s OSL Exchange and HashKey’s HashKey Pro Exchange. OSL Exchange is a strategic partner of SlowMist, while HashKey Pro Exchange has enjoyed a longstanding collaboration with SlowMist.
SlowMist conducted thorough security audits and assessments for HashKey Pro Exchange, and the compliance security audit report issued by SlowMist received recognition from HKSFC. The SlowMist security team has been assisting several cryptocurrency trading platforms in Hong Kong with their license applications, including HashKey Pro, HKBGE (in the licensing process), and MEEX (planning to apply).
Since its inception, SlowMist has provided compliance security audit reports to numerous cryptocurrency trading platforms, securing regulatory approvals, including a license for HashKey Pro in 2023. Continuous compliance remains an ongoing commitment.
Adhering to HKSFC’s latest requirements and international OWASP standards, SlowMist has created a checklist for HKSFC-compliant security audits. By closely examining HKSFC’s circulars and guidelines and leveraging their extensive blockchain security experience, SlowMist has developed an HKSFC-compliant security audit framework that aligns with OWASP international standards for Web, iOS, and Android, ensuring project compliance with HKSFC while adapting to OWASP standards.
With the introduction of new virtual asset policies, the blockchain sector is embracing fresh opportunities, positioning the Web3 industry as the frontier for innovation among entrepreneurs and builders. Compliance is becoming an inevitable trend as regulatory oversight in the cryptocurrency industry continues to mature, safeguarding user assets, rights, and market stability.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.