Hong Kong’s New Crypto Regulations may Attract Web3 Firms Back
Hong Kong’s new proposed crypto regulation received Huobi Global’s, a Chinese crypto platform, pledge to return, and more firms may arrive, experts said.
Hong Kong’s upcoming regulatory changes for crypto-related service providers might lure more business and talent back to the city, as it aims to regain its position as an international crypto hub.
Hong Kong’s SFC (Securities and Futures Commission) published draft rules on 20th Feb 2023, for virtual asset trading platforms and sought public feedback. The new licencing regime is set to take effect in June and the SFC is planning to ensure crypto exchanges apply for licences which will allow low retail investors to trade certain large-capitalisation tokens.
HKMA (Hong Kong Monetary Authority), the city’s de facto central bank, stated in a consultation document released a month prior that it will initiate a mandatory licensing regime for stablecoin issuers, and will not allow algorithmic stablecoins.
In 2021, China banned crypto transactions, but Hong Kong has now set up a new regulation that eventually extends to real crypto trading.
Angela Ang, the former regulator at Singapore’s monetary authority and the senior policy advisor at California-based blockchain intelligence firm TRM Labs, stated, “Like many of its global counterparts, including Singapore, the SFC is attempting to thread the needle between digital asset innovation and investor protection in a post-FTX world.”
To improve the city’s Web3.0 industry and development, Hong Kong’s financial secretary Paul Chan commented on Wednesday (22 Feb 2023) that HK$50 million ($6.37 million US) has been set aside by the government just to establish the web3 industry, which has brought a “golden opportunity” for innovative development.
Justin Sun, World Trade Organisation representative and founder of Tron (a blockchain DAO ecosystem), has revealed that Huobi Global is applying for a crypto trading licence in Hong Kong. Sun also shared with the publication Nikkei Asia that Huobi is looking to move its Asia headquarter from Singapore to Hong Kong.
Adrian Wang, the CEO of Metalpha, a Hong Kong-headquartered digital asset management platform, said, “The proposed policy went into more detail on anti-money laundering and know-your-customer with new requirements such as conflict of interest also included. Overall, this is good for the industry safeguarding the rights of retail investors.”
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