The CEO of Hong Kong’s Securities and Futures Fee (SFC), Julia Leung Fung-yee, addressed Hong Kong’s embrace of Web3 regulation following the collapse of crypto change FTX final November, noting that crypto buying and selling is a vital a part of the digital asset ecosystem.
Throughout a current speech, Leung reportedly defined that the brand new licensing system for digital asset suppliers will be certain that traders are protected whereas taking into consideration the dangers that monetary establishments face. Within the chief’s view, incorporating digital property suppliers into the regulatory system was the one strategy to embrace innovation and strengthen market belief after FTX chapter.
Hong Kong used the FTX collapse to scale back regulatory dangers related to centralized exchanges. In December, almost 30 days after the change disaster unfolded, its legislative council included virtual asset service providers in the same legislation that governs conventional monetary establishments.
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The brand new guidelines carry strict AML tips and investor safety legal guidelines to digital exchanges seeking to open a enterprise in Hong Kong. It additionally introduces a brand new licensing scheme that allows retail investors the ability to trade in digital property. Till just lately, digital property buying and selling was restricted to skilled traders and merchants with at the very least $1 million in bankable property.
In response to Leung, Hong Kong’s cryptocurrency licensing system is an efficient instance of China’s “one nation, two programs” coverage. Cryptocurrencies have been banned in Mainland China since 2021, whereas Hong Kong took a distinct strategy by selling a welcoming atmosphere for crypto enterprise.
Over the previous 12 months, greater than 150 Web3 corporations have established operations in Hong Kong’s Cyberport — a digital hub created by the native authorities to advertise innovation. The inflow got here after the federal government allotted 50 million yuan ($7 million) to hurry up the event of Web3.
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