The CEO of the Securities and Futures Fee (SFC) of Hong Kong, Julia Leung Fung-yee, addressed Hong Kong’s embrace of Web3 regulation following the collapse of crypto alternate FTX in November 2022, stating that crypto buying and selling is a crucial a part of the digital asset ecosystem.
Through the speech, Leung reportedly defined that the brand new licensing system for digital asset suppliers would be certain that buyers are protected whereas contemplating the dangers that monetary establishments face. In her view, incorporating digital belongings suppliers into the regulatory system was the one method to embrace innovation and strengthen market belief after FTX’s chapter.
Hong Kong used the FTX collapse to scale back regulatory dangers related to centralized exchanges. In December 2022 — lower than a month after the alternate disaster unfolded — its legislative council included virtual asset service providers in the identical laws governing conventional monetary establishments.
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The brand new guidelines carry strict Anti-Cash Laundering tips and investor safety legal guidelines to digital asset exchanges trying to open a enterprise in Hong Kong. It additionally introduces a brand new licensing scheme that allows retail investors the ability to trade digital belongings. Till lately, digital asset buying and selling was restricted to skilled buyers and merchants with no less than $1 million in bankable belongings.
In keeping with 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 unique strategy by selling a welcoming surroundings for the crypto business.
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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