Hong Kong is about to launch a brand new regulatory framework for over-the-counter (OTC) cryptocurrency buying and selling platforms. The measure, introduced by the territory’s Monetary Companies and the Treasury Bureau (FSTB), underscores Hong Kong’s dedication to making sure a “clear” digital asset market.
The announcement said that the native authorities’s upcoming regulatory advisory opinion is a key step in addressing the dangers related to over-the-counter cryptocurrency venues, which have change into more and more accepted by the general public.
Proposal to manage OTC dangers
The Secretary for Monetary Companies and the Treasury, Mr Hui Ching-yu, emphasised the need of this requirement within the announcement. His issues stem from the function OTC venues have performed in a number of fraud circumstances involving unlicensed digital asset (VA) buying and selling platforms. Hui identified:
In reality, OTC venues performed a job in some fraud circumstances final yr involving some unlicensed VA buying and selling platforms, deceptive traders into directing funds to those unlicensed platforms.
The problem highlights the rising want for regulatory oversight in an space the place oversight has up to now been minimal. The proposed framework goals to guard cryptocurrency traders by making certain these platforms function in a “regulated and monitored” surroundings. Hui defined:
We subsequently imagine there’s a want for regulation of OTC venues and we’ll shortly launch a session on the proposed regulatory framework.
An upcoming session by Hong Kong’s monetary authorities goals to deliver these over-the-counter buying and selling venues below a “complete” regulatory regime. The transfer is anticipated to align the operations of those platforms with international finest practices, making certain they supply a “secure and truthful” buying and selling surroundings for customers.
Hong Kong’s Progress on Cryptocurrency Regulation
This regulatory improvement in Hong Kong comes six months after the area’s Securities and Futures Fee (SFC) took proactive steps to securely embody retail traders within the cryptocurrency market. This step contains upgrading native alternate HashKey to offer regulated crypto companies to retail traders consistent with newly established pointers.
As well as, Hong Kong thought-about permitting particular person traders to take part in spot cryptocurrency ETFs late final yr. The transfer was a part of a strategic transfer to determine town as a number one digital asset hub within the Asia-Pacific area, which was later realized when the authorities introduced their readiness to simply accept purposes for spot cryptocurrency exchange-traded funds (ETFs).
The SFC and the Hong Kong Financial Authority collectively issued a round laying the muse for this main improvement. Curiously, this determination comes shortly after the U.S. Securities and Change Fee (SEC) accredited a number of spot BTC ETF purposes.
Harvest Funds Hong Kong, a big Chinese language fund firm, has utilized to the Hong Kong Securities and Futures Fee for a Bitcoin spot ETF, marking a crucial second for the area’s monetary panorama. The Securities and Futures Fee is reportedly contemplating dashing up the approval course of for the spot ETF and plans to listing it on the Hong Kong Inventory Change shortly after the Lunar New Yr.
Featured photos from Unsplash, charts from TradingView
