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Hong Kong Regulator Says DeFi Projects Could Face Regulatory Requirements

Keith Choy, interim head of intermediaries at Hong Kong’s Securities and Futures Commission (SFC), has stated that decentralized finance (DeFi) projects that fall under the Securities and Futures Ordinance (SFO) will be subject to the same regulatory requirements as traditional financial activity. Choy noted that providing automated trading services and offering a collective investment scheme to the public in Hong Kong both require authorization and licensing. He also highlighted issues of financial stability, limited transparency, and market integrity in DeFi. The SFC had previously warned investors of the risks associated with virtual asset platforms, and Hong Kong's new licensing regime for virtual asset trading platforms takes effect in June 2023, with a grandfathering period. (Coindesk)

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