The Hong Kong Securities and Futures Professionals Association (HKSFPA) has recommended that Hong Kong virtual currency companies establish a self-regulatory committee to monitor each other's compliance.
“Hong Kong's financial market industry places too much emphasis on supervision, but there is no organization to sustain the overall development of the industry,” the Hong Kong Monetary Authority said in an April 22 recommendation.
The administration also pointed to the need for Hong Kong to remain competitive in global securities markets and “strengthen its position as an international financial center.” Outlining its next steps, the HKSFPA said it would create a “statutory self-regulatory” and self-governing body to delegate licensing powers to industry players instead of the City's regulator, the Securities and Futures Commission (SFC). He recommended that.
“In the case of Hong Kong, the Commission has decided that the Securities and Futures Commission will continue to have the power to supervise market conduct, but will separate its licensing powers only to the securities industry, making it a self-regulatory body comprised of the futures industry and the asset management sector. industry and the virtual asset industry. ”
In a similar recommendation from August last year, the HKSFPA referred to “balanced supervision and development” to prevent Hong Kong's virtual asset industry from “veering towards extreme supervision.”
However, self-regulation does not always involve balanced risk-reward dynamics.
For example, Lithuania plans to tighten cryptocurrency regulations starting in 2025 following reports of compliance violations and embezzlement. The Baltic state has issued licenses to more than 580 crypto companies, but there is currently little oversight by licensees.
However, Hong Kong regulators are much more lenient towards virtual asset companies than regulators in other parts of the world.
On April 15, the SFC approved Spot Bitcoin and Ether exchange-traded funds for issuers including Harvest Fund Management, Vocera Asset Management, and China Asset Management (China Asset Management). Last year, regulators issued official crypto asset licenses to crypto exchanges Hashkey and OSL.
Meanwhile, the U.S. Securities and Exchange Commission has not yet approved the Spot Ether ETF or provided a specific license for the registration of virtual currency exchanges. Furthermore, the outlook for approval remains bleak at this time.
Related: Hong Kong investment firm Victory Securities reveals fees for Bitcoin and Ether ETFs
