The Hong Kong Monetary Authority stated that crypto companies should expect a rigorous regulatory regime.
Hong Kong Says It Will Avoid Any 'Light Touch' Approach to Cryptocurrency Regulations
The licensing regime for crypto exchanges is expected to begin on June 1. The head of the Hong Kong Monetary Authority said the rules would be 'tight'.
"Our regulations will be tight," Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, said in an interview today.
“We're going to let them reproduce the ecosystem here, and that actually brings a lot of excitement. But that doesn't mean light touch editing,” he said.
Hong Kong is launching a new licensing regime for virtual asset service providers on June 1, and plans to allow individual investors to buy and sell major tokens such as Bitcoin and Ethereum.
This move to spur the digital asset sector is seen as part of a broader effort to restore the city's credentials as a cutting-edge financial hub after Covid-related restrictions and political unrest led to a brain drain.
Yue said that more guidance is being prepared for banks on serving their crypto clients, and that the Securities and Futures Commission will soon announce the results of its deliberations on the scope of individual investor engagement.
Regulators around the world are considering how to deal with the crypto industry after a series of booms led by last year's market crash and the stunning bankruptcy of the FTX exchange.
In the US, authorities have cracked down on digital asset businesses with sanctions and lawsuits pushing companies overseas.
Yue said that Hong Kong's crypto firewalls have been very tight for the past few years. He added that they have now been reduced to a "reasonable and sustainable level" but will not allow a repeat of any FTX-type incidents in the city.
*Not investment advice.