Hong Kong officials recommend the city’s crypto industry self-regulates

The Hong Kong Securities and Futures Professionals Association (HKSFPA) advises local crypto businesses to establish a self-governing body and keep an eye on each other to ensure adherence to regulations.

According to the HKSFPA’s recommendation letter dated April 22, the financial market industry in Hong Kong places excessive emphasis on regulation. However, there isn’t any entity responsible for promoting the industry’s growth as a whole.

The administrative authority recognized the importance of keeping Hong Kong at the forefront of the international securities market. To strengthen its position as a global financial hub, they suggested the following actions. The Securities and Futures Commission (SFC), Hong Kong’s regulatory body, was advised by the HKSFPA to create autonomous organizations with self-regulating powers for delegating licensing duties to industry professionals.

“In the case of Hong Kong, the Commission recommends that the Securities and Futures Commission still retains the power to supervise market conduct, but splits the licensing power to solely the securities industry, A self-regulatory institution composed of the futures industry, asset management industry and virtual asset industry.”

Based on a previous recommendation letter from last August, the Hong Kong Securities and Futures Commission (HKSFPA) emphasized the importance of maintaining a balanced approach to supervising and fostering growth in Hong Kong’s virtual asset industry. This approach helps ensure that the industry does not veer too far in terms of regulatory oversight.

Hong Kong officials recommend the city’s crypto industry self-regulates

That said, self-regulation doesn’t always come with a balanced risk-reward dynamic. 

Starting in 2025, Lithuania will strengthen its cryptocurrency regulations in response to reported issues with compliance and misappropriation of funds. To date, over 580 crypto companies have been granted licenses in this Baltic country, yet they currently face minimal supervision from regulatory authorities.

In contrast to regulatory bodies in other regions, Hong Kong authorities have shown greater acceptance towards virtual asset companies.

April 15 saw the Securities and Futures Commission (SFC) give its approval for Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC) to launch Bitcoin and Ether spot exchange-traded funds (ETFs). In the previous year, the regulatory body granted official virtual asset licenses to Hashkey and OSL crypto exchanges.

Currently, the SEC in the United States has neither authorized a spot Ether ETF nor issued crypto exchanges registration licenses. The prospects for these approvals appearing anytime soon are not optimistic.

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2024-04-22 18:49