Hong Kong Regulator Warns Crypto Firms, Won’t Allow ‘Light Touch’ Approach
Hong Kong regulators have been very forthcoming when it comes to building a regulatory framework for its crypto industry. The latest report shows 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, regulators have issued a warning that crypto firms should not expect any additional favors or leniency in the regulatory approach. Speaking at the Bloomberg Wealth Asia Summit on Tuesday, May 9, Hong Kong Monetary Authority Chief Executive Eddie Yue said:
“Our regulation will be tight. We will let them create the ecosystem here and that actually brings a lot of excitement. But that doesn’t mean light-touch regulation.”
From June 1 onwards, 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. Over 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’s SFC on Regulatory Guidance
As Said, the Hong Kong Securities and Futures Commission 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 last year 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.
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 stablecoins due by 2023-2024. With this legislative framework, we expect more transparency in Hong Kong’s regulatory framework.
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