- New Rules for Virtual Asset Trading
- Strict Penalties for Unlicensed Crypto Exchanges
- Hong Kong's Evolving Crypto Landscape
Hong Kong is considering involving the Securities and Futures Commission (SFC) and the Customs and Excise Department (C&ED) in regulating over-the-counter (OTC) virtual asset trading services.
New Rules for Virtual Asset Trading
According to an exclusive report from the South China Morning Post (SCMP), Hong Kong is planning to involve the Securities and Futures Commission (SFC) and the Customs and Excise Department (C&ED) in regulating over-the-counter (OTC) virtual asset trading services. This initiative aims to address the challenges of managing the crypto industry.
Strict Penalties for Unlicensed Crypto Exchanges
In February, Hong Kong authorities proposed a stringent scheme to address the issue of unlicensed crypto asset exchange operations. Under this scheme, individuals operating unlicensed crypto exchanges could face up to two years in prison and a fine of HK$1 million. This move follows a significant investor loss of HK$1.6 billion from crypto scams last year. Physical OTC shops were identified as major facilitators of these fraudulent activities, channeling retail investors’ funds into fraudulent schemes.
Hong Kong's Evolving Crypto Landscape
Over the past two years, Hong Kong has been refining its approach to the crypto industry, aiming to attract investment while mitigating risks for retail investors. This evolving strategy includes the introduction of exchange-traded funds (ETFs) that invest directly in crypto tokens. Hong Kong has become the first major financial market to approve spot ether ETFs. The city is also working on a regulatory framework for stablecoins, typically pegged to fiat currencies such as the US dollar.
Hong Kong is actively enhancing crypto trading regulations, aiming to create a favorable environment for investors and reduce fraudulent activities.
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