Hong Kong to Implement Tight Regulations on Cryptocurrency
Hong Kong Monetary Authority Chief Executive Eddie Yue stated in an interview at the Bloomberg Wealth Asia Summit that the regulation of crypto in Hong Kong will be tight, and that the city will not adopt a light-touch approach when it comes to regulating digital assets.
Yue stated that while Hong Kong wants to let companies create a crypto ecosystem in the city, this doesn’t mean that they will be lax in their regulations. He added that further guidance for banks on servicing crypto clients is in the works, and the Securities and Futures Commission will soon announce the results of its deliberations on the scope of retail-investor participation.
Yue emphasized that while Hong Kong’s crypto guardrails were very tight in the last few years, they have now been lowered to a “reasonable and sustainable level,” but they won’t allow the recurrence of any FTX-type event in the city. This refers to the incident in 2022 where FTX, a major crypto exchange, suffered a massive hack resulting in a loss of $940 million.
Hong Kong has been tightening its regulation of crypto in recent years, with the Securities and Futures Commission imposing strict rules on the sale of digital assets. This move is in line with other countries that have been taking a more conservative approach to regulating crypto, such as China and South Korea.
The regulation of crypto has been a topic of debate globally, with some arguing that too much regulation could stifle innovation and growth in the industry, while others believe that stricter regulation is necessary to protect consumers and prevent fraud and money laundering.
As Hong Kong moves forward with its tight regulation of crypto, it remains to be seen how this will affect the growth of the industry in the city. However, with other countries also taking a more conservative approach to regulating crypto, it seems that tighter regulations may become the norm in the industry.
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