Hong Kong’s Securities and Futures Commission (SFC), has considered the proposal of a senior executive regarding stricter regulations on crypto assets. According to the recent reports, the SFC executive believes that stricter laws are required in order to tackle fraudulent activities related to crypto assets, and offered suggestions on future guidance on trading crypto assets in the special administrative region.
Hong Kong officials permit the trading of crypto assets in the state, unlike mainland China. Crypto trading in the state is supervised under the financial authorities, all transactions on digital currencies are scrutinized by the authorities. In light of the trading permit, government regulators in the special administrative region have come forward with proposals that will limit crypto trading activities to professional investors. Moreover, the officials will also impose new licensing requirements to grant investors the permit to engage in crypto trading activities.
Liang Fengyi, the deputy chief executive of the SFC, has stated that the regulatory agency is obligated to expand the range of supervision on crypto assets in the city-state, especially since Hong Kong pertains to unlicensed crypto trading. The deputy chief executive added that crypto assets are not recognized as securities nor are they regarded as a means of payment in the city-state, therefore the nascent asset class does not fall under the SFC’s jurisdiction. As a result of the SFC’s limited jurisdiction, several investors have suffered significant losses in recent weeks due to fraudulent trading activities in the special administrative region.
Numerous crypto exchanges in Hong Kong have limited their trading services in the city-state, or outright ceased their operations in the past few months. Futu, a brokerage firm in Hong Kong, announced in June that the company will be holding crypto futures trading due to regulatory concerns from the authorities. In August, one of the major crypto exchanges Binance announced its move to block crypto derivatives trading for the local traders.
In a previous report dating back to May 2021, the Financial Services along with the Treasury Bureau of Hong Kong announced imposing strict regulations on crypto assets. The move resulted in limited crypto access for investors and made it downright impossible to access portfolios with roughly $1 million in assets. If the regulations were passed, the new guidelines would outright restrict crypto access to approximately 93% of Hong Kong’s population.
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