Crypto Warning: Hong Kong Regulator to Take Tough Stand!
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Crypto Warning: Hong Kong Regulator to Take Tough Stand!

written by John Murphy | May 9, 2023

When creating a regulatory framework for its cryptocurrency business, Hong Kong legislators have been imminent. According to the most recent source, the Securities and Futures Commission of Hong Kong will shortly publish guidelines for cryptocurrency exchanges. It clearly seems that Hong Kong Regulator to Take Tough Stand in the coming days.

Keys Takeaways:

  • The Hong Kong authorities gave a warning to crypto companies in creating the regulatory framework.
  • Hong Kong will initiate a new licensing scheme for cryptocurrency service providers on 1 June.
  • The Future Commission and Hong Kong Securities have worked together to provide instructions to the crypto companies.
  • Yue banned FTX-style events in Hong Kong.
  • The licensing scheme is going to implement by 2023 and 2024.

Hong Kong aims to become the crypto center of Asia. So, regulators have cautioned that cryptocurrency companies shouldn’t anticipate any more favors or relaxation in the regulatory approach. 

Hong Kong Regulator to Take Tough Stand

On Tuesday, 9 May, Eddie Yue, a Hong Kong Monetary Chief Executive, made a statement while speaking to Bloomberg Wealth Asia. He said that our rules will be strict. It will create our ecology, resulting in a lot of enthusiasm. But light-handed regulation is not meant. 

Hong Kong will launch a new licensing scheme for cryptocurrency service providers on 1 June. This scheme aims to enable investors to trade significant cryptocurrencies like Bitcoin and Ethereum.

Hong Kong has promoted the adoption of cryptocurrencies over the past eight months to recover its status as a significant financial center.

Hong Kong Regulator to Take Tough Stand
Source: CoinDesk

The Future Commission and Hong Kong Securities have been working to provide banks with further instructions on how to deal with cryptocurrency clients. Yue stated that they would shortly share their thoughts on the extent of engagement by retail investors.

Last year cryptocurrency exchange FTX faced a significant crypto winter and a high-profile collapse. After this, regulators worldwide have been debating how to handle crypto companies. We already know that US authorities have pursued crypto companies vigorously over the past several months.

However, Yue acknowledged that Hong Kong had taken a hard approach toward cryptocurrencies for several years. They are currently reduced to a sustainable and manageable level. Yue has warned that no FTX-style events would be permitted in Hong Kong.

Moreover, authorities of Hong Kong are trying to launch a licensing system for stablecoins, which will be implemented by 2023 and 2024. In the regulatory framework of Hong Kong, we anticipate more transparency with this legislative framework.

Look at Jaw Dropping Reaction of Crypto Titans to HK Crypto Warning

Crypto News (CoinGape) took to Twitter and announced that the Hong Kong regulator warned cryptocurrency companies that it wouldn’t tolerate a “light touch” approach.

HodlnBuidl took to Twitter and announced that despite adopting a crypto-friendly policy, the Hong Kong authorities indicated that they would not let crypto firms proceed in a relaxing way.

Crypto411 took to Twitter and announced that Future Commissions and Hong Kong Securities would soon introduce instructions for cryptocurrency companies.

Do you Know? 

  • Hong Kong’s Securities and Futures Commission (SFC) recently issued a statement warning cryptocurrency firms that they will not tolerate a “light touch” approach.
  • The SFC had previously granted licenses to seven virtual asset trading platforms and clarified that the same standards of conduct, which apply to other types of regulated firms, will apply to cryptocurrency firms as well.
  • The SFC also warned that it will take appropriate enforcement action against any firm that does not comply with these standards.
  • The statement further clarified that the SFC will not tolerate any attempts to circumvent the regulations, such as through the use of third-party providers or anonymous payment systems.
  • This is the first time that the SFC has taken such a strong stance against cryptocurrency firms, and it is likely to have a significant impact on the industry

Crux:

The Hong Kong authorities gave a warning to the cryptocurrency companies regarding the relaxation in the regulatory approach. Hong Kong initiates the licensing scheme to enable the trading of significant cryptocurrencies like Ethereum and Bitcoin. This scheme is going to implement by 2023 and 2024