As a seasoned analyst with over two decades of experience in the financial sector, I find Hong Kong’s move towards regulating OTC virtual asset trading services to be a prudent step towards maintaining its status as a leading global financial hub. The collaboration between the SFC and C&ED is a wise decision, leveraging the strengths of both entities to create a robust regulatory environment for the crypto industry.
Should the new regulation be implemented, the Securities and Futures Commission (SFC) is set to work alongside the Companies and Securities Department and Enforcement Division (C&ED) to supervise Over-the-Counter (OTC) services in Hong Kong.
Hong Kong, known as a major financial center, is considering implementing a new regulatory system for over-the-counter (OTC) trading of virtual assets. The Securities and Futures Commission (SFC) has been discussing this matter with various industry players. If the plan moves forward, the SFC will collaborate with the Customs and Excise Department (C&ED) to strengthen oversight in the cryptocurrency sector.
As a crypto investor, I’ve noticed a proposal from February that proposed the C&ED would be solely responsible for overseeing the OTC virtual asset vertical. However, this idea has left many in the industry scratching their heads, as it seems counterintuitive to give charge of OTC services to the C&ED when the SFC already handles most crypto-related matters.
Information provided by anonymous sources speaking to the South China Morning Post reveals that the Securities and Futures Commission (SFC) is actively collaborating with the government and other regulatory bodies to create a strong, transparent, and uniform regulatory framework for the virtual asset industry in Hong Kong. This is aimed at promoting sustainable and responsible growth within this sector.
Following the $225 million JPEX crypto exchange fraud, Hong Kong decided to regulate Over-The-Counter (OTC) shops. It was discovered during investigations that OTC services had been channeling funds from unsuspecting retail investors towards fraudulent ventures like JPEX.
SFC Taking the Strict Approach With Exchanges Applying for Registration
As a crypto investor, I’m excited about Hong Kong’s ambition to establish itself as the premier crypto hub. However, the Securities and Futures Commission (SFC) has issued a warning to crypto exchanges seeking licenses, urging them to strengthen their risk management and know-your-customer (KYC) procedures. Currently, there are 11 applicants, but only Hashkey and OSL operate legally within this jurisdiction. The SFC has also released a list of unlicensed exchanges to protect investors from potential scams. Previously, the SFC had prohibited unlicensed entities from offering crypto exchange and trading services.
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2024-09-15 18:24