As Hong Kong (China) strives to become a global Web3 hub, the Hong Kong Securities and Futures Commission (SFC) has announced a new regulation allowing retail trading of cryptocurrencies to begin. from 1.6.
This shows that Hong Kong is working to restore its status as a global financial center. According to SCMP exchanges, the new regulation will allow licensed cryptocurrency to sell to investors large market capitalization digital currencies such as Bitcoin or Ethereum.
Since June of this year, it is a criminal offense to advertise for unlicensed cryptocurrency exchanges. People using deceptive means to entice others to buy virtual assets will also be breaking the law, the SFC added
According to Bloomberg, the SFC emphasized that licensed exchanges should comply with a series of investor protection measures, including the introduction, governance, and due diligence of tokens, before providing services to investors.
In addition to the planned expansion of trading rights, Hong Kong officials have also pledged to have enough safeguards in place to avoid the crises the crypto industry saw last year, such as the collapse of the FTX exchange.
Eddie Yue Wai-man, CEO of the Hong Kong Monetary Authority (HKMA), said at the Bloomberg Wealth Asia Summit that regulations will be stricter. Hong Kong will let the industry grow to create an ecosystem, but that doesn’t mean the regulations will be lax, Yue added
SFC announced that Hong Kong-licensed exchanges will have to meet requirements including secure asset custody, segregation of customer assets, conflict of interest avoidance, and cybersecurity standards.
Exchanges are expected to conduct a comprehensive assessment of investors’ understanding of the nature and risks of digital assets and risk tolerance and establish exposure limits. Licensed platforms should also form a review and admission committee to govern the tokens they offer.
After the market downturn in 2022 that led to a series of bankruptcies, many governments were afraid of digital assets. Regulators around the world are grappling with how to monitor the cryptocurrency industry. In contrast, regions like Hong Kong and Dubai are trying to attract crypto-related investment
