The biggest financial regulatory agency in Hong Kong is the Securities and Futures Commission which oversees the native stock market. At present, where the cryptocurrency sector is facing regulatory issues in the USA, Hong Kong has started to transition into a refugee camp for cryptocurrency entities.
It means that cryptocurrency enterprises are looking to find new headquarters or trading jurisdictions.
To this end, the FCS will issue the new regulatory charter as soon as May this year. The cryptocurrency enterprises will be able to view the new licensing requirements issued by Hong Kong officials. The news was shared by Bloomberg and quoted by CEO Julia Leung during an informal setup.
She has maintained that since the announcement of the new crypto charter, the regulatory agency has received more than 150 responses from various crypto enterprises.
SFC is Taking Necessary Measures to Protect Investors
The regulatory agency has maintained that it intends to lift any bans imposed on commercial enterprises hailing from the crypto sector. To this end, SFC may seize operations for any digital asset trading platforms that are not licensed before June 24.
Thus, all the crypto enterprises in the sector must complete the licensing process before the given timeline. SFC has taken a new stance on the crypto sector to ensure investor protection and contribute to market development.
Hong Kong has recently changed its regulatory stance towards the crypto sector, considering the possibility of regulatory exodus in the USA. Meanwhile, the regulators in Singapore undertook a more stringent approach towards crypto regulations on account of the Terra and Three Arrow Capital incidents last year.
These two major cryptocurrency enterprises were based out of Singapore when they collapsed. On the other hand, key crypto stakeholders in the USA, like Coinbase, have started to take an active approach to the matter of regulatory clarity and dynamics.
Coinbase started a petition concerning crypto regulations in 2021. The public-listed crypto exchange was campaigning for better crypto regulatory clarity under the pretext of this petition. However, the firm has been unable to elicit a formal response from the financial regulator till now.
Therefore, the exchange has decided to seek legal assistance and become the first flank to bring about regulatory clarity for the crypto sector within the US jurisdiction. Some cryptocurrency enthusiasts believe that crypto can become a regulated market that is headed by the SEC and operate in the capacity of digital securities.
The recent stance of Coinbase is also a response to the receipt of the Wells Notice by the SEC. Wells notice is considered a prerequisite for a formal prosecution getting started by SEC.
Many proponents believe that the crypto sector must join efforts to make sure that they can find more solid ground and a stable foundation in the US legislature.
There are some concerns about the nature and implications of crypto regulations, such as how they could define digital assets. Meanwhile, there have been some rumours surrounding Operation Choke Point 2.0 that alleges the SEC of discouraging crypto sector development under the pretence of US code violation lawsuits.
However, it is important to keep in mind that the Biden administration signed the $1.2 trillion bipartisan infrastructure bill in 2021 that intends to collect billions in capital gains taxes from the local crypto sector and can play an important role in offsetting the debt ceiling issue that the US government is prepping to address.