Hong Kong Embraces Web3 Regulation

6/24/2023 11:00:06 PM

(MENAFN- coinxposure) julia leung fung-yee, the chief executive officer of hong kong's securities and futures commission (sfc), addressed hong kong's adoption of web3 regulation after the collapse of crypto exchange ftx in november, observing that crypto trading is an integral part of the virtual asset ecosystem.

leung reportedly explained in a recent speech that the new licensing system for virtual asset providers will protect investors while considering the risks financial institutions face.

after ftx's insolvency, the chief believed incorporating virtual asset providers into the regulatory system was the only way to embrace innovation and strengthen market confidence.

hong kong reduced regulatory risks associated with centralized exchanges by utilizing the ftx collapse .

its legislative council included virtual asset service providers in the same legislation that governs traditional financial institutions in december, nearly thirty days after the onset of the exchange crisis.

virtual exchanges wishing to establish a business in hong kong are now subject to stringent aml guidelines and investor protection laws.

in addition, it introduces a new licensing scheme that permits retail investors to trade in virtual assets. until recently, the trading of digital assets was limited to professional investors and speculators with at least $1 million in liquid assets.

according to leung, hong kong's licensing system for cryptocurrencies is an excellent illustration of china's“one country, two systems” policy.

see also the role of asics in crypto mining – pros and cons 1 month ago

since 2021, cryptocurrencies have been prohibited in mainland china, while hong kong has taken a distinct approach by fostering a business-friendly environment for cryptocurrencies.

over the past year, more than 150 web3 companies have established operations in hong kong's cyberport, a digital center created by the local government to foster innovation.

the influx occurred after the government allocated 7 million yuan to accelerate the development of web 3.

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