- Hong Kong regulators are keeping crypto regulations in view.
- Stringent rules caused crypto giants to exit Hong Kong.
- Lawmakers think stringent rules would hurt Hong Kong’s Web3 developmental goals.
Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, announced today that regulators will monitor market developments and review requirements for virtual asset-related activities “as appropriate.” Hui made this statement in response to questions from a lawmaker in Hong Kong’s Legislative Council.
Hui clarified the requirements for licensed corporations and registered institutions to engage in crypto-related activities. Licensed corporations must notify the Securities and Futures Commission (SFC) before participating, while registered institutions must inform both the SFC and the Hong Kong Monetary Authority (HKMA).
Hui emphasized that these notifications are sufficient for licensed and registered entities to operate within the region. Intermediaries already licensed and registered do not need to apply for license modifications before conducting crypto-related activities.
Lawmakers raised questions following the recent withdrawal of licenses by several global crypto exchanges, including OKX, Gate.io, and HTX, in May. The SFC had set a June 1 deadline for all crypto trading platforms operating in Hong Kong to acquire a license.
Duncan Chiu, a Hong Kong lawmaker, criticized the “excessively stringent” licensing regulations, claiming they have deterred global exchanges from operating in the region. In an opinion piece published last month, Chiu highlighted how these strict conditions and the subsequent withdrawal of multiple exchanges have shaken investor confidence. He believes the current situation will hinder Hong Kong’s progress towards Web3 development.
As lawmakers question whether strict licensing requirements are stifling innovation and deterring global players, the government’s willingness to review these rules is a welcome sign to the crypto at large.
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