Hong Kong securities regulator may be empowered to prohibit operations of licensed crypto service providers
Cryptocurrency exchanges in Hong Kong will have to obtain a license from the territory’s market regulator and limit their offering of services to professional investors.
Carrying out regulated virtual asset activities without a licence is liable to a fine of HK$5 million and imprisonment for seven years; And, in the case of a continuing offence, a further fine of HK$100,000 for each day during which the offence was continued.
— 8BTCnews (@btcinchina) May 21, 2021
Hong Kong government eyes restricting or prohibiting licensed crypto businesses’ operations
The Financial Services and the Treasury Bureau has been consulting since last year on proposed changes to the current “opt-in” system, under which exchanges may apply to be licensed by the Securities and Futures Commission, but are under no obligation to do so.
Under Hong Kong law, an investor must hold a portfolio worth HK$ 8 million ($ 1.03 million) to qualify as a professional investor.
Hong Kong hosts a large number of crypto exchanges, including some of the world’s largest, and crypto industry participants have resisted moves to block exchanges. to retail investors, said that regulation designed to do so could cause a wave of migration away from city floors and direct investors into unregulated markets.
The FSTB said it would propose the law during the 2021-22 session of the city’s Legislative Assembly, according to a Reuters report.
If the proposals do in fact pass and become law, the jurisdiction’s financial regulator will in turn apparently have ultimate power over the crypto industry in Hong Kong. The agency also argued that the framework is aligned with the recommendations from the Financial Action Task Force.
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