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Cryptocurrency market legal regulation processes continue to be a hot topic, with many country governments making significant progress. A Hong Kong finance official announced on February 21 that the government would try to offer licensing services for stablecoin and over-the-counter (OTC) crypto trade regulations as soon as consultations progress.
Hong Kong and the Crypto Industry
Financial Services and the Treasury Secretary Christopher Hui, in a written response to a legislator in the Legislative Council, said that the FSTB initiated a public consultation earlier this month on legal proposals to introduce a licensing service for providers of OTC crypto trade services. The consultation will end on April 12.
In December, the FSTB and the de facto central bank, the Hong Kong Monetary Authority, also launched a joint consultation on the regulation of stablecoin issuers, which is set to conclude on February 29. They proposed that all fiat-referenced stablecoin issuers must obtain a license from HKMA. Hui stated:
“Depending on the results of the consultation and the progress of the preparatory work, the government will introduce the above licensing regimes to the Legislative Council as soon as possible.”
Steps Being Taken in the Crypto Market
With these developments, Hui mentioned in his written response that the Securities and Futures Commission has caught an increasing number of crypto-related criminal cases in recent years. According to Hui, Hong Kong saw a total of 3,415 crypto-related criminal cases last year, up from 2,336 in 2022 and 1,397 in 2021. The amount of money involved in these cases rose to approximately 4.4 billion Hong Kong dollars, worth about 562 million US dollars last year, from 1.7 billion Hong Kong dollars in 2022 and 824 million Hong Kong dollars in 2021.
Hong Kong is striving to become a crypto hub while regulators adopt a strict approach to phase out platforms they see as bad actors. Hui added that, for example, authorities raided the JPEX cryptocurrency exchange last year and have arrested 70 individuals associated with the platform as of February 20, with no prosecution started yet.
