Hong Kong regulators are stepping up their game when it comes to monitoring the activities of the crypto industry.
According to a Securities and Futures Commission report filed on February 6, plans to hire four additional employees to “better oversee” the activities of local virtual asset (VA) providers. Additionally, the additional oversight will help “better assess compliance and risk” by allowing retail investors to trade virtual assets on regulated platforms.
The commission wrote:
“This is in response to an increasing number of traders who have expressed interest in conducting VA activities such as trading platforms and VA fund management.”
This comes at the start of the introduction of a new licensing regime to allow for more retail investment in cryptocurrencies.
Previously, licensed trading platforms in Hong Kong could only serve professional investors or investors with portfolios of at least $1 million (HK$8 million), according to regulators.
In December 2022, the new licensing regime was approved as an amendment to the anti-money laundering and financing of terrorism bill. However, it comes into force in June 2023, giving regulators and local companies time to prepare for a new wave of participation in the sector.
Hong Kong has been active in its plan to revamp its crypto industry and become a Web3 innovation hub. Part of this plan included a $500 million investment fund to drive mass adoption in the local industry.
Recently, The Hong Kong Monetary Authority released a statement stating that it will not tolerate algorithmic stablecoins in its new regulation. However, the regulator stated that it intends to develop a comprehensive regulatory framework for stablecoins, which will be based on the full support of such assets.
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