Hong Kong is quickly becoming a global hub for the crypto industry, especially after the recent proposals by the SFC that promises increased regulations on the crypto industry. As per the Security and Futures Commission (SFC)’s consultation paper in February this year, Virtual Asset Service Providers (VASPs) operating in Hong Kong must follow specific investor protection measures and also meet Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

Lucy Gazmararian, the founder of Token Bay Capital and a SFC Fintech Advisory Group member stated that though these regulations are quite rigorous, but these are put in place for a “good reason”. She explained that while the startup crypto businesses might be having limited funding, they still need to comply with the regulatory framework which will involve significant costs in the form of insurance, independent assessment reports, and necessary storage regulations.

Christian Hui, the Secretary for Financial Services and the Treasury noted the enthusiasm amongs digital asset firms to establish a presence in Hong Kong in recent months. He also noted that the SFC is looking towards gaining feedbacks with regard to the regulations and plans to carefully review all the submissions made by firms while also trying to “get everything right”. The submissions for feedback closed on March 31.

Hong Kong thus seems to be determined to become the next global crypto hub by putting in place robust standards and stringent regulations so that investors can benefit from these services. This also promises to create job opportunities in the city, further contributing to its growth.



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