Defi projects could be exposed to regulatory requirements, says the Hong Kong regulatory authority

The central theses

• A regulatory authority in Hong Kong has announced that defi projects could be subject to regulatory requirements.

• The SFC said that defi activities fall into the area of application of the Securities and futures ordinance.

• Hong Kong's new license system for trading platforms for digital assets comes into force in June 2023

Defi projects could be exposed to regulatory requirements in Hong Kong

Keith Choy, intermediary intermediary at the Securities and Futures Commission (SFC) from Hong Kong, gave the 12th

According to the SFC, defi activities fall into the scope of the Securities and futures Ordinance and are subject to the same regulatory requirements as traditional Finance (tradfi).

choy mentioned this when he spoke at the Web3 Festival in Hong Kong. The latest cryptocurrency messages comes after the United States and France have recently published reports on defect regulation.

choy's speech does not come as a surprise, since the SFC has previously pointed out that the defi ecosystem must be regulated. However, the regulatory authority still has to explain its plans to properly regulate the ecosystem. Choy said;

"The provision of automated trade services is a regulated activity within the framework of the SFO. If a decentralized platform allows the trade in virtual assets that represent securities or futures in the sense of the SFO, the platform and the operators must have a type 7 license."

also collective capital investments require a permit