Hong Kong pushes for self-regulatory bodies in the crypto industry

The Hong Kong regulators asserted, “Many ways in the world are where economically developed regions set up statutory semi-official industry self-regulatory institutions with the intention of focusing on industry development.” As HKSFPA has recommended, crypto firms in Hong Kong may set up a self-regulatory committee and be responsible for being compliant, too.

Hong Kong’s push for crypto self-regulation

“The HKSPFA administration letter, dated 22 April, claims that the only focus of the local market for financial services is supervision. But no organization maintains the industry’s ongoing development in Hong Kong.”

The administrative body then noted the need for Hong Kong to stay competitive in the global securities market and “consolidate its status as an international financial center.” In outlining the next steps, the HKSFPA recommended the city’s regulator, the Securities & Futures Commission (SFC), establish “statutory self-regulating” and autonomous bodies that would instead delegate licensing powers to industry players. The administrative body then noted the need for Hong Kong to stay competitive in the global securities market and “consolidate its status as an international financial center.” In outlining the next steps, the HKSFPA recommended that the city’s regulator, the Securities & Futures Commission (SFC), establish “statutory self-regulating” and autonomous bodies that would delegate licensing powers to industry players instead:

“Hong Kong case is also addressed by the Commission, which suggests that the Securities Futures Commission remains to control market conduct, but it should divest the authority for licensing only to a securities industry, which must be composed of the futures industry, asset management industry, and virtual assets industries.” Last August, the HKSFPA in its recommendation letter proposed for a “balanced supervision and development” instead of a “definition

Striking a balance: Development vs. oversight

Among the measures, Lithuania sets to begin deregulating its cryptocurrency, which will protect only from unofficial advances and embezzlement starting in 2025. The Baltic is proud to have more than 580 cryptocurrency firms that enjoy carefree licensing, and the state avoids them but grants minimum attention to its licensees. Nevertheless, Hong Kong regulators have been relatively less strict concerning virtual asset firms than their counterparts around the globe.

On April 15, the SFC endorsed Bitcoin and Ether trading exchange-traded funds for issuers such as Harvest and Bosera. Likewise, the state-owned asset manager China Asset Management (ChinaAMC) was also approved. Last year, the authorities approved OSL and Hashkey for their official virtual dollar exchange licenses.

At the same time, the Securities and Exchange Commission in the U.S. does not yet allow a spot Ether ETF or an exchange to obtain a license aside from the three licenses in cryptocurrencies. Moreover, the final stop for that drug so far is tiny.