Cryptolaw

🔍 The Securities and Futures Commission (SFC) of Hong Kong has released a comprehensive policy statement that reshapes the regulatory landscape for:

- Virtual asset (VA) portfolio managers,
- Crypto-focused investment funds and distributors,
- Exchanges and trading platforms operating with digital assets.

🚨 What’s it about?

The SFC is introducing mandatory licensing and compliance standards for crypto-related activities — even if the tokens involved don’t qualify as “securities” under traditional legal definitions.

🔑 Key Highlights:

1. VA Funds and Managers:

Any fund with ≥10% of AUM in crypto must:

- Be licensed,
- Follow strict rules on custody, audits, disclosures, and AML/CFT,
- Serve professional investors only.

2. Fund Distribution:

- Distribution of VA funds (whether or not they include “securities”) is restricted to licensed Type 1 intermediaries.
- Full compliance with suitability and disclosure obligations is required.

3. Crypto Exchanges and Platforms:

The SFC is launching a Regulatory Sandbox for platforms willing to meet high regulatory standards.
Key conditions include:

- Access restricted to professional investors,
- Pre-funded trades only (no margin, no derivatives),
- Robust KYC/AML, custody rules, anti-manipulation safeguards,
- Mandatory insurance (100% hot wallet, ≥95% cold wallet).

📊 Why Does This Matter?

- A gateway to Asia’s Web3 market: Hong Kong aims to become a regulated crypto hub.
- Grey zones are closing: Unlicensed players risk exclusion.
- Reputation matters: SFC licensing can be a major credibility boost for projects, especially when seeking exchange listings or capital.

⚖️ Final Note from Legal Kornet

Legal Kornet monitors key regulatory developments across Hong Kong, the EU, the U.S., and other major jurisdictions. We support projects, funds, and platforms in aligning with SFC requirements — including navigating the licensing process and the Regulatory Sandbox.

#CryptoLaw #SFC #HongKong #CryptoCompliance #Web3

The U.S. Senate just made a major move in crypto legislation by passing the GENIUS Act — a groundbreaking bill designed to regulate payment stablecoins. This bipartisan effort is poised to become the first federal framework in the United States focused specifically on digital dollar-backed assets. Here's everything you need to know.
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🧠 What is the GENIUS Act?
The GENIUS Act stands for Guiding and Establishing National Innovation for U.S. Stablecoins. Introduced by a coalition of bipartisan senators including Bill Hagerty, Cynthia Lummis, and Kirsten Gillibrand, the bill aims to:
Provide legal clarity for stablecoin issuers
Establish a clear federal and state regulatory framework
Promote U.S. dollar dominance in the global crypto space
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🔑 Key Features of the GENIUS Act
1️⃣ Federal & State Licensing
The bill introduces a dual-track licensing system:
Large issuers (>$10B) will be regulated at the federal level by the Federal Reserve or OCC.
Smaller issuers can operate with state-level charters, promoting inclusion for startups and community banks.
2️⃣ 1:1 Reserve Requirements
Stablecoins must be fully backed by high-quality liquid assets like USD and Treasury bills, with:
Monthly reserve disclosures
Independent audits
Clear redemption rights for users
3️⃣ Clear Classification
The act explicitly excludes payment stablecoins from being treated as securities or commodities, minimizing SEC involvement and offering a clear path for compliant growth.
4️⃣ AML/KYC Protections
Stablecoin issuers must comply with existing anti-money laundering laws, enhancing transparency and national security compliance.
5️⃣ Consumer Protections
If a stablecoin issuer fails, users have top priority on the reserves.
Customer funds must be segregated from corporate accounts, reducing bankruptcy risk.
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📊 Why This Bill Matters
✅ Boosts Institutional Confidence
Regulatory clarity helps banks, fintechs, and crypto platforms innovate with confidence.
✅ Strengthens the U.S. Dollar
With the rise of global stablecoins and CBDCs, the GENIUS Act aims to keep the U.S. dollar relevant in the digital era.
✅ Encourages Innovation
Clear guidelines could attract more stablecoin projects and Web3 businesses to the U.S.
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⚠️ Controversies & Concerns
Exemptions for Presidential Investments: Critics, including Sen. Elizabeth Warren, raised concerns that the bill does not prohibit the sitting President (currently Donald Trump) from investing in stablecoins.
Favoring Big Players? Some believe strict audit requirements may disadvantage smaller or decentralized issuers.
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🏛️ What’s Next?
The GENIUS Act passed the Senate with a strong 68-30 vote and now heads to the Republican-led House. If approved, it could be signed into law this summer, making 2025 a defining year for crypto regulation in the U.S.
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📌 Final Thoughts
The GENIUS Act could reshape the future of stablecoins, providing the foundation for secure, regulated digital dollar infrastructure. Whether you're a crypto investor, builder, or regulator — this bill is one to watch.
#GENIUSAct #CryptoLaw #Stablecoin #USDC
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