As the US government continues to keep the crypto industry in check with a series of regulations, other locations are emerging as new hubs for the crypto industry. On Monday, Hong Kong proposed rules that would allow retail investors to trade certain “big tokens” on licensed exchanges. This is in stark contrast to cross-border mainland China, where cryptocurrency-related transactions are completely prohibited.
The city’s Securities and Futures Commission has not specified which large tokens will be allowed, but a spokesperson for the regulator said Bitcoin and Ether, two of the largest digital assets by market value He said it was likely.
Since China cracked down on cryptocurrency trading, the country’s web3 startup has given up on its home market and shifted its focus overseas. While some of the more resourceful companies have opted to set up new bases in friendlier locations such as Singapore or Dubai, they usually keep developers in China and invest in China’s affordable We continue to tap into our large pool of technical talent for pricing.
With Hong Kong introducing a more relaxed regulatory environment for cryptocurrencies, some of these China-founded web3 companies in exile may return and move closer to home.
China’s crackdown on cryptocurrency trading to protect retail investors from speculative activity now seems prescient given the spate of bankruptcies and layoffs that have disrupted the global cryptocurrency industry. be But even as the cryptocurrency bubble bursts, money and talent continue to pour into web3. It’s hard to imagine Beijing sitting still while the rest of the world is working on building blocks that some say will spark a new wave of innovation as big as the current Internet itself.
Hong Kong, historically a financial hub, could become a laboratory for Chinese policymakers to test the potential of blockchain, with a buffer for the country’s billion netizens. .
The proposal put forward by Hong Kong stipulates that all centralized cryptocurrency exchanges operating in Hong Kong or marketing services to Hong Kong investors must obtain a license from the Securities and Futures Authority. . The requirements cover key areas such as “safe custody of assets, client verification, conflict of interest, cybersecurity, accounting and auditing, risk management, anti-money laundering/counter-terrorism financing, and market fraud prevention.” I am,” read the announcement.
“In addition to ensuring suitability in client onboarding and token approval, other key proposals relate to token due diligence, governance and disclosure.”
In other words, centralized crypto exchanges should be banned from Hong Kong IP addresses until they have the relevant permits to operate in Hong Kong.
Regulatory requirements can be negotiated until March 31st and the new licensing regime will go into effect on June 1st.
