A regulatory framework for cryptocurrency exchanges has been unveiled in Hong Kong, Cointelegraph reported. Regulators are now accepting applications from crypto exchanges.

The Securities and Futures Commission (SFC) met with digital asset trading platform operators to discuss their operations and outline its expectations in terms of custody, know-your-customer requirements, anti-money laundering rules and market manipulation.

“The framework will enable virtual asset trading platforms to be regulated by the SFC, a major development which builds on a way forward I outlined at the same time last year,” said SFC Chief Executive Ashley Alder.

The SFC first established guidelines for crypto funds and exchanges in November 2018. Now, a year later, the regulator is taking that work forward, Securities and Futures Commission.

Private investor Dovey Wan said the establishment of a regulatory framework is a major move forward for the entire cryptocurrency industry. She said Huobi, in particular, may become the first licensed exchange in Hong Kong.

She said, “Considering Huobi has already backdoor listed on HKex, this will def play them a huge favor to be the first legalized Chinese crypto exchange.”

In March, the SFC released regulatory guidelines for security token offerings. The agency said security tokens are “likely to be ‘securities’” under Hong Kong’s Securities and Futures Ordinance, and thus fall under existing securities laws.

The full position paper on the new regulatory framework can be found here.