A proper regulatory system for cryptocurrencies and virtual assets can facilitate development, protect investors, and adhere to international regulatory standards, Christopher Hui, Hong Kong’s secretary for financial services and the treasury, told the StartmeupHK Festival’s Virtual FinTech Forum today. He was commenting on a regulatory plan that will see around almost all Hongkongers shut out of crypto trading.
Fast Facts:
- “Imposing mandatory requirements to protect investors, prohibit market manipulation, and guard against money laundering and terrorist financing, we believe the proposed regime will further facilitate development of the virtual assets industry in Hong Kong, leveraging our world-class regulatory framework,” Hui said.
- Hui’s comments follow the release of the results of a public consultation on legislative proposals to enhance anti-money laundering and counter-terrorist financing regulations in the city.
- The proposed changes include requiring businesses seeking to operate virtual asset exchanges to apply for licenses from Hong Kong’s Securities and Futures Commission, and allowing foreign-incorporated companies also to obtain licenses as virtual asset service providers. Perhaps most controversially, investors will be excluded from trading in cryptocurrencies unless their investment is worth at least US$1 million, a restriction that excludes the vast majority of the city’s population, and which has prompted expectations that many crypto exchanges operating there will close.
- Hong Kong’s government plans to introduce an amendment bill based on the consultation results in the Legislative Council’s 2021-22 session.