- Hong Kong’s Secretary for Financial Services announced that retail stablecoin trading will be prohibited until 2024.
- Christopher Hui reported that the restriction will last until the comprehensive stablecoin policy is released next year.
- The scandal related to the crypto exchange JPEX has raised doubts about the regulatory system.
According to a local news outlet, Ming Pao, the Secretary for Financial Services and the Treasury in Hong Kong, Christopher Hui, has announced that retail trading of stablecoins will not be permitted until the comprehensive stablecoin policy is unveiled next year.
While Hong Kong continues to advance in the adoption of cryptocurrency trading for individual investors, Hui emphasized that regulations for stablecoins such as Tether or USD Coin have not been adopted yet, resulting in the restriction of these assets’ trading for retail investors.
Hong Kong’s ongoing scandal with crypto exchange JPEX has raised serious concerns regarding regulatory systems, reported Hui during a live online program of the Investment and Financial Education Committee. To keep track of suspicious crypto trading platforms, the Securities and Futures Commission (SFC) disclosed plans to launch a “blacklist” on September 24.
Moreover, Hong Kong police have initiated a task force dedicated to monitoring crypto exchanges. As per a statement released by the SFC yesterday, the task force was formed to strengthen the Hong Kong Police and SFC’s cooperation in the surveillance of questionable and unlawful activities occurring on virtual asset trading platforms.
Keeping these in mind, Xu explained that investing in unregulated platforms carries significant risks due to their lack of transparency and potential instability in their operations. Additionally, he noted that during disputes between investors and such platforms, there may be no avenue for complaints.
Furthermore, if these platforms go bankrupt, cease operations, engage in fraudulent activities, breach contracts, or fall victim to theft, investors are at risk of losing all the assets they have deposited on these platforms.
On June 20, the South China Morning Post reported that Hong Kong officials had affirmed their dedication to implementing stablecoin regulations by 2024. This is part of the city’s efforts to fortify its virtual asset licensing framework and establish itself as a prominent hub for Web3.
At the time, Hui conveyed that Hong Kong is committed to pursuing a comprehensive and predictable regulatory approach towards digital assets that adheres to the principle of “similar risk, similar regulation.”
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