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Hong Kong shows desire to become crypto hub with new regulation • InNewCL

Hong Kong shows desire to become crypto hub with new regulation • InNewCL

#Hong #Kong #shows #desire #crypto #hub #regulation #InNewCL Welcome to InNewCL, here is the new story we have for you today:

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As the US government continues to restrict the crypto industry with a barrage of regulations, other places are emerging as new hubs for the virtual assets industry. On Monday, Hong Kong proposed rules that would allow retail investors to trade certain “large-cap tokens” on licensed exchanges, a stark contrast to mainland China across its border, where crypto-related transactions are outright banned.

The city’s Securities and Futures Commission did not specify which major tokens would be allowed, although a spokesman for the regulator said it would likely be bitcoin and ether, two of the largest digital assets by market value.

Since China’s crackdown on crypto trading, the country’s Web3 startups have largely abandoned their home market and ventured abroad. Some of the more resourceful have chosen to set up new bases in friendlier places like Singapore and Dubai, though they typically continue to keep developers in China to tap into the country’s large pool of affordable tech talent.

With the introduction of a more relaxed cryptocurrency regulatory environment in Hong Kong, some of these China-founded Web3 companies in exile could return and be closer to home.

With the spate of bankruptcies and layoffs that has roiled the global crypto industry, China’s crackdown on crypto trading to protect individual investors from speculative activity now seems prescient. But despite the bursting of the crypto bubble, money and talent continue to flow into web3. It’s hard to imagine Beijing sitting still while the rest of the world works on the building blocks that some claim will unleash a new wave of innovation as big as the current internet itself.

Hong Kong, historically a financial hub, can potentially be a laboratory for China’s policymakers to test blockchain’s potential with some buffer for the country’s one billion internet users.

The proposal put forward by Hong Kong stipulates that all centralized virtual currency exchanges operating in the city or marketing services to the territory’s investors must obtain licenses from the Securities and Futures Authority. The requirements “cover key areas such as safe custody of assets, know-your-client, conflicts of interest, cybersecurity, accounting and auditing, risk management, anti-money laundering/counter-terrorism financing and prevention of market abuse.” announcement reads.

“Besides ensuring suitability in customer onboarding and token approval, the other key proposals relate to token due diligence, governance and disclosures.”

In other words, centralized crypto exchanges must ban Hong Kong IP addresses until they receive the appropriate permits to operate there.

The regulatory requirements can be consulted until March 31st and the new licensing system will come into effect on June 1st.

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