Could Hong Kong Crypto Regulations Kill the Industry?

Could Hong Kong Crypto Regulations Kill the Industry?


Hong Kong’s Securities and Futures Commission introduces new regulations requiring asset custody and segregation compliance for firms intending to locally offer retail crypto products, including a ban on holding stablecoins, with early license applicants limited to a list of approved coins.

Hong Kong’s Securities and Futures Commission (SFC) will require corporations intending to locally offer retail cryptocurrency products to comply with investment custody and segregation regulation.

The agency announced the new regulations following a recent consultation.

Hong Kong Retail Investors Cannot Hold Stablecoins

Early cryptocurrency license applicants can only list Chainlink, Cardano (ADA), Polygon, Avalanche (AVAX), Solana (SOL) Bitcoin, Ethereum (ETH), Bitcoin (BTC) Cash, Litecoin, and Polkadot (DOT). These coins appear on at least two of the major cryptocurrency indexes from Galaxy, Bitwise, WisdomTree, 21Shares, and Nasdaq.

Licensees may not advertise specific cryptocurrency assets or engage in proprietary trading or lending. They need likewise employ measures to prevent money laundering and terrorism financing.

READ NOW
Binances Latest Venture: Thai Crypto Exchange Launching Q4 2023

The approved regulations will prevent traders from holding crypto stablecoins until the SFC tables new regulations. Investors cannot earn yields similar to customers of Gemini Exchange’s Earn product.

Up to now, the SFC has not is still greenlighted applications for corporations wishing to come under the new regime.

The SFC will gazette virtual investment platform requirements on May 25 to become effective on June 1.

SFC Regulation Welcomed Regardless of Restrictions

Hong Kong received plaudits from the cryptocurrency industry when it announced its willingness to embrace cryptocurrency regulation, especially amid a reluctance from the United States to consider a new framework. 

Binance Crypto exchange CEO Changpeng Zhao has claimed that “bad restrictive” regulations are better than no regulations. He likewise criticized enforcement without clear regulations.

READ NOW
Block Analitica Recommends Boosting DAI Savings Rate to 3.3% – Makerdaos Next Move?

China’s hostility towards cryptocurrency has seen numerous corporations consider Hong Kong, including research corporations Kaiko and cryptocurrency exchange Bybit. Bybit desires to make Hong Kong the base of its Asian operations. 

American cryptocurrency entrepreneur Cameron Winklevoss predicted  the following bull run would start in Asia.

Brian Armstrong, the CEO of the largest cryptocurrency exchange in the United States, Coinbase, warned that the United States would get left behind amid regulatory developments in the European Union, Hong Kong, and the U.K.

Nonetheless, some of the preliminary excitement abated during the consultation process, which saw lawmakers from the Asian region err on the side of caution. 

Alessio Quaglini of custodian HexTrust has criticized a requirement that a wholly-owned subsidiary of the licensee must hold customer assets.

He claimed that customer assets should be separate from an exchange. Corporations have also questioned  the expense of licenses and whether a cryptocurrency company can operate profitably in the Asian region.



Source

Read Disclaimer
This page is simply meant to provide information. It does not constitute a direct offer to purchase or sell, a solicitation of an offer to buy or sell, or a suggestion or endorsement of any goods, services, or businesses. Lolacoin.org does not offer accounting, tax, or legal advice. When using or relying on any of the products, services, or content described in this article, neither the firm nor the author is liable, directly or indirectly, for any harm or loss that may result. Read more at Important Disclaimers and at Risk Disclaimers.




Follow us

Latest Crypto News

Share via
Share via
Send this to a friend