“Many economically successful countries around the globe have created statutory, semi-official industry self-regulatory agencies to concentrate on industry growth,” the Hong Kong regulators noted.
Crypto companies in Hong Kong should form a self-regulatory committee and check each other’s compliance, according to the HKSFPA.
According to a recommendation letter from the HKSFPA dated April 22, “there is no organization to sustain the overall growth of the sector.” This means that the industry in Hong Kong is too concerned with oversight.
Hong Kong must maintain its competitiveness in the global securities market and “consolidate its standing as an international financial center,” the administrative body said. Rather than imposing licensing powers on industry actors, the Securities & Futures Commission (SFC), the city’s regulator, should set up “statutory self-regulating” and independent entities, according to the HKSFPA’s proposed next steps:
“Regarding Hong Kong, the Commission has proposed that the Securities and Futures Commission should continue to have authority over market supervision, but that the responsibility for issuing licences should be divided among the securities industry, an independent body that includes asset management, virtual assets, and futures.”
In a letter with identical recommendations from August of last year, the HKSFPA emphasized the need for “balanced supervision and growth” to keep the virtual assets sector in Hong Kong “from heading in the extreme direction of monitoring.”
However, the risk-benefit analysis of self-regulation isn’t always straight. First, after allegations of compliance problems and fraud, Lithuania will begin to strengthen its crypto legislation in 2025. There is now little control over the 580 crypto companies that the Baltic country has licensed.
Regulators in Hong Kong, on the other hand, have shown far greater patience towards virtual asset businesses than their international colleagues.
Issuers like Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC) have their spot Bitcoin and Ether exchange-traded funds authorized by the SFC on April 15. The authority officially licensed virtual assets to the Hashkey and OSL cryptocurrency exchanges last year.
The U.S. Securities and Exchange Commission has yet to provide particular licenses to crypto exchanges or authorize a spot Ether ETF. Moreover, their approvals are still looking bleak at the moment.
Also Read: Thailand will prevent access to “unauthorized” cryptocurrency platforms
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