AUTHORITY STRIKE IN HONG KONG!
The Regulator demands licensed exchanges to strengthen their security to protect client funds
The financial regulator of #HongKong , the Securities and Futures Commission (SFC), has taken a decisive step to strengthen the security of digital assets. In response to recent hacks and scams, the regulator has issued new guidance requiring licensed cryptocurrency trading platforms to significantly improve their custody practices.
The new guidelines aim to address the deficiencies identified in an internal review conducted by the SFC. These standards cover everything from senior management oversight and cold wallet infrastructure to third-party wallet supervision and real-time threat monitoring.
Response to Global Incidents: The SFC justifies this measure as a response to "multiple overseas incidents" that have exposed vulnerabilities and resulted in millions in losses for clients.
Immediate Effect: The requirements outlined in the circular take effect immediately, necessitating rapid adaptation by virtual asset trading platforms (VATP).
Market Consolidation: Experts like Alessio Quaglini from Hex Trust believe that these regulations could consolidate the market around operators with the scale and expertise needed to meet high standards, thus fostering a safer and more reliable framework for the custody of digital assets in Hong Kong.