Hong Kong outlines upcoming crypto licensing regime, officials try to soothe the worries
Hong Kong’s Securities and Futures Commission (SFC) has recently proposed a licensing regime for cryptocurrency exchanges. This new regime set to take effect from June 2023 calls for exchanges to comply with a number of requirements, including a requirement to maintain a loss reserve in case of theft or hacking, as well as mandatory customer account verification. In addition, exchanges will be required to carry out anti-money laundering procedures and report any suspicious activities.
Market players' concerns
This proposal has generated some concern among the crypto community, as it seems to be aimed at dampening the enthusiasm for cryptocurrency trading in Hong Kong. However, SFC officials have insisted that this is not the case. In a statement quoted by the South China Morning Post, SFC CEO Julia Leung said that the new licensing regime is aimed at protecting investors and maintaining the integrity and stability of the market:
"As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle."
This new licensing regime could have a significant impact on the future of the cryptocurrency industry in Hong Kong. If exchanges are required to comply with a number of tough requirements, this could dampen enthusiasm for cryptocurrency trading in the city. In addition, if exchanges are unable to meet these requirements, they may face difficulty operating in the region.
You can our detailed primes about crypto regulations in different countries here.