Hong Kong is about to introduce a brand new regulatory framework concentrating on over-the-counter (OTC) crypto buying and selling platforms. This initiative, announced by the area’s Monetary Providers and the Treasury Bureau (FSTB), underscores Hong Kong’s dedication to making sure a “transparent” digital asset market.
The native authorities’s impending publication of this regulatory session represents a crucial step in addressing the dangers related to OTC crypto venues, which have turn into more and more accessible to most people, in response to the announcement.
Proposal To Regulate OTC Enterprise
Christopher Hui, Hong Kong’s Secretary for Monetary Providers and the Treasury emphasised the need of this regulation within the announcement. His concern stems from OTC venues‘ function in a number of fraud instances involving unlicensed digital asset (VA) buying and selling platforms. Hui famous:
In reality, OTC venues have performed a sure function in a few of the fraud instances involving some unlicensed VA buying and selling platforms final 12 months, having misled buyers to channel funds to those unlicensed platforms.
This problem highlights the rising want for regulatory oversight in an space that, till now, has operated with minimal supervision. The proposed framework goals to safeguard crypto buyers by guaranteeing these platforms function in a “regulated and monitored” surroundings. Hui defined:
Due to this fact, we imagine that it’s essential to deliver OTC venues underneath regulation, and we are going to launch a session very quickly on the proposed regulatory framework.
The approaching session by Hong Kong’s monetary authorities goals to deliver these OTC venues underneath a “comprehensive” regulatory regime. This transfer is predicted to align the operations of those platforms with international greatest practices, guaranteeing that they supply “safe and fair” buying and selling environments for his or her customers.
Hong Kong’s Progressive Steps In Crypto Regulation
This regulatory growth in Hong Kong comes six months after the area’s Securities and Futures Fee (SFC) took proactive steps to integrate retail investors safely into the crypto market. This step included upgrading HashKey, a neighborhood alternate, to supply regulated crypto companies to retail buyers underneath newly established pointers.
Furthermore, Hong Kong contemplated permitting particular person buyers to take part in spot Crypto ETFs late final 12 months. This transfer, a part of strategic initiatives to determine the town as a number one digital asset hub within the Asia-Pacific area, was later realized when the authorities announced their readiness to accept applications for spot crypto exchange-traded funds (ETFs).
The SFC and the Hong Kong Financial Authority collectively revealed circulars laying the groundwork for this vital growth. Curiously, this resolution adopted shortly after the US Securities and Exchange Commission (SEC) approved several spot BTC ETF applications.
Harvest Fund Hong Kong, a significant fund firm in China, has already applied to a Bitcoin spot ETF to the Hong Kong SFC, marking a pivotal second within the area’s monetary panorama. The SFC is reportedly contemplating expediting the approval course of for this spot ETF, with plans for a possible itemizing on the Hong Kong Inventory Alternate quickly after the Chinese language New Yr.
Featured picture from Unsplash, Chart from TradingView
