Hong Kong regulator said they wouldn’t allow crypto businesses to take a lenient route ahead, despite a crypto-friendly approach.
As the global digital asset market continue to look for regulatory clarity from top financial watchdogs, Hong Kong plans to deliver a framework.
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Hong Kong’s Securities and Futures Commission (SFC) is reportedly releasing guidelines for crypto exchanges. This development comes in when one of the biggest financial regulators U.S. Securities and Exchange Commission (SEC) is struggling to provide regulatory framework.
Recent reports show that Hong Kong’s Securities and Futures Commission will soon be releasing guidelines for crypto exchanges. As Hong Kong gears up for becoming the crypto hub of Asia, SFC regulators have declared that crypto firms should not expect any leniency in the regulatory approach.
Hong Kong Monetary Authority Chief Executive Eddie Yue, while speaking at the Bloomberg Wealth Asia Summit today, Tuesday, May 9, said:
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“Our regulation will be tight. We will let them create the ecosystem here and that brings a lot of excitement. But that doesn’t mean light-touch regulation.”
At the Bloomberg Wealth Asia Summit today, Tuesday 9 May, 2023, Hong Kong indicated that crypto companies drawn by the city’s push to create a digital-asset hub should expect an exacting regulatory regime.
“Our regulation will be tight,” Hong Kong Monetary Authority Chief Executive Eddie Yue said in an interview at the Bloomberg Summit today. “We will let them create the ecosystem here and that actually brings a lot of excitement. But that doesn’t mean light-touch regulation.”
Starting June 1, 2023, Hong Kong plans to start a new licensing regime for crypto service providers thereby allowing investors to trade major cryptocurrencies such as Bitcoin and Ethereum.
Recall that the SFC’s Chief Executive Officer, Julia Leung in her speech at Bloomberg said there will be guidelines on the licensing regime for virtual-asset exchanges in May.
Regulators globally are grappling with how to handle the crypto industry following last year’s market crash and a series of blowups headlined by the spectacular bankruptcy of the FTX exchange.
Following last year market crash and a string of catastrophes highlighted by the dramatic bankruptcy of the FTX exchange, regulators throughout the world are unsure on how to regulate the cryptocurrency industry.
Recall that in the last eight months, Hong Kong has been making a push toward crypto adoption and restoring the city’s credentials as a major financial hub. Hong Kong regulators have been very forthcoming when it comes to building a regulatory framework for its crypto industry.
Hong Kong’s SFC on Regulatory Framework
The Hong Kong Securities and Futures Commission (SFC) is working on providing further guidance to banks in servicing crypto clients. Yue said that they shall soon provide deliberations on the scope of retail investor participation.
Regulators across the world have been grappling with how to deal with the crypto industry after a major crypto winter in 2022 as well as the high-profile blowup of crypto exchange FTX last year.
As we already know the US regulators have been going hard after crypto firms over the last few months. Recall the recent UN Secretary-General, Letitia James proposed the CRPTO bill.
However, Yue admitted that Hong Kong had a very strict approach towards crypto over the past few years. But now they have been lowered to a “reasonable and sustainable level”. Yue has warned that Hong Kong won’t be allowing any FTX-type event in the city.
Additionally, Hong Kong regulators are also working on introducing a licensing regime for stable coins due by 2023-2024. With this legislative framework, we expect more transparency in Hong Kong’s Crypto regulation.