Hong Kong to Update Crypto Regulations and Licensing

As a researcher with experience in the financial industry, I believe that Hong Kong is taking significant strides towards embracing the virtual asset sector while ensuring regulatory compliance. The recent announcements from the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) indicate a proactive approach to addressing concerns raised by lawmakers regarding the crypto licensing process and distribution rules for intermediaries.

The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) plan to reassess the regulations concerning virtual asset-related businesses in response to legislators’ requests for expediting the crypto licensing procedure and loosening distribution guidelines for intermediaries.

Hui highlighted that duly licensed corporations and registered institutions are permitted to offer crypto products following regulatory notification, without requiring modifications to their existing licenses. This revelation comes at a critical juncture, particularly after several international exchanges such as OKX, Gate.io, and HTX pulled back their licensing applications with the SFC in May, ahead of stringent deadlines.

Since its debut in March, Hong Kong’s redesigned Capital Investment Entrance Scheme (CIES) has drawn significant international investment, resulting in over 300 application submissions being handled by Invest Hong Kong (InvestHK).

As a crypto investor, I’ve been closely following the latest updates from the Immigration Department regarding their investment scheme. So far, they have granted approval in principle to 80 applicants, enabling us to move forward with our investment plans. The good news is that the department has introduced more flexibility when it comes to demonstrating our financial capability. Instead of requiring a specific amount of investment, we now need to show a net worth of at least HKD 10 million, which must have been maintained over the past two years.

The revised Wealth Management Connect Scheme (WMC) in the Greater Bay Area (GBA), referred to as WMC 2.0, has been instrumental in expanding investment prospects and facilitating easier collaboration between investors and brokerage firms since its launch in February 2024. Key improvements include an increase in individual investment limits and relaxed entry conditions for brokerages, leading to more seamless financial transactions across borders.

As a crypto investor, I’m excited to see that the Securities and Futures Commission (SFC) and China Securities Regulatory Commission are working together to bring more brokerage firms into the virtual asset (VA) sector. The regulatory bodies, specifically the SFC and HKMA in Hong Kong, have been refining the VA regulatory landscape. A joint circular was released in December 2023, requiring intermediaries looking to engage in VA activities to notify both the SFC and HKMA beforehand.

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2024-07-04 00:52