Section 11Part 2 — Registered Persons and Virtual Asset Service Licensees
Requirements: virtual asset trading platforms
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The Authority may, where necessary, impose requirements on a licensee that operates a virtual asset trading platform including —
the nature of the access of users to the platform;
the type of client that it may market its services to;
the types of virtual assets that may, or may not, be traded on the virtual asset trading platform;
requirements for the listing of virtual assets;
net worth and reporting requirements;
identification and management of conflicts of interest and price discovery mechanisms to prevent price manipulation and other unfair trading practices; Section 11 Virtual Asset (Service Providers) Act (2024 Revision)
disclosures to clients concerning the transparency of operations of the virtual asset trading platform including disclosures to clients on custodial arrangements and insurance against theft or loss of assets;
the monitoring and supervision of trading activity that is taking place on the virtual asset trading platform and the freezing and suspension of trading of virtual assets;
the technology used in the operation of the trading platform including information on the resiliency of the platform and cybersecurity safeguards in place;
the clearing and settlement process for transactions between buyers and sellers of virtual assets;
the provision of financing for the purchase of virtual assets;
controls to mitigate against money laundering, terrorist financing and proliferation financing; and
any other requirement that the Authority considers to be in the best interest of the users of the virtual asset trading platform.
A licensee that operates a virtual asset trading platform shall not —
provide financing to its clients for the purchase of virtual assets unless disclosures are made to clients regarding the terms of, and the risk of, the financing;
engage in trading or market making behaviour for its own account which could be detrimental to the interests of its clients unless these activities are necessary for the operation of the virtual asset trading platform and these activities have been disclosed to the clients of the platform;
allow a virtual asset to be traded on its platform unless it has assured itself that the virtual asset is not presented in a deceiving manner or in a manner that is meant to defraud holders of funds or value;
allow a client to purchase or trade in virtual assets unless the licensee has assured itself that the client is aware of the risks of purchasing, holding or trading the virtual asset and has provided disclosures in a form that the client can understand; or
provide fiat currency to fiat currency exchange services to users of the trading platform.
The licensee shall carry out reasonable due diligence procedures on virtual assets and their issuers that are listed on the platform.
A licensee who is operating a virtual asset trading platform shall apply to the Authority, in the prescribed form, for approval prior to engaging in securities investment business which relates to virtual assets. Virtual Asset (Service Providers) Act (2024 Revision) Section 12
On receipt of an application for approval under subsection (4), the Authority shall determine whether registration or an additional licence is required under the Securities Investment Business Act (2020 Revision) and shall notify the applicant accordingly.
In making a determination under subsection (5), the Authority shall assess whether the virtual asset trading platform —
engages in, offers or facilitates securities investment business;
lists or facilitates the issuance of securities which are virtual assets in accordance with the Securities Investment Business Act (2020 Revision) ; and
whether any additional supervision is required under the Securities Investment Business Act (2020 Revision) .
The Authority may grant approval for the application under subsection (4) where it considers that the activity is adequately supervised under this Act and no additional supervision is required under the Securities Investment Business Act (2020 Revision) and may impose additional regulatory requirements specific to the activity carried out by the licensee.
A licensee operating a virtual asset trading platform shall comply with the applicable requirements under this section and section 12 and a person who contravenes this provision commits an offence and is liable on conviction to a fine of one hundred thousand dollars.