Hong Kong's Securities and Futures Commission to Form Advisory Panel for Cryptocurrency Exchanges
The Hong Kong SFC is set to launch a consultative panel aimed at enhancing transparency and responsibility among licensed cryptocurrency exchanges.
The Hong Kong Securities and Futures Commission (SFC) is initiating a consultative panel to support licensed cryptocurrency exchanges, as stated by Eric Yip, the SFC’s Executive Director for Intermediaries.
Yip confirmed the panel will include representatives from all licensed exchanges. This effort aims to enhance community transparency and shared accountability among licensees.
“We expect the panel deliberation will result in a comprehensive virtual assets white paper that outlines the development roadmap for products and services, as well as potential enhancement in compliance and risk management,” he said.
Such initiatives are part of the city's strategy to formalize a robust framework for digital assets, which includes upcoming regulations for OTC trading and stablecoins. Earlier this year, Hong Kong instituted a new licensing framework for virtual asset trading platforms. Currently, three exchanges are licensed, and the SFC is reviewing applications for another fourteen, eleven of which already operate in Hong Kong.
Despite these steps, Yip noted the importance of safeguarding investors through proper regulation and education, highlighting that in the first half of 2023, HK$1.5 billion (approximately $193 million) was lost to investment scams. He pointed out that while cryptocurrency remains a hot topic for global regulators, it is crucial to maintain a balance between development and investor protection.
Yip emphasized the need for continued dialogue among regulators worldwide to address challenges such as regulatory arbitrage, as various major exchanges have opted out of Hong Kong's licensing process, including OKX and HTX.
In conclusion, Yip urged for a response to market demands while maintaining high regulatory standards, stating, “If virtual asset liquidity still resides in unregulated VATPs after all our efforts, and regulated entities cannot operate a sustainable business model, then we need to reflect on why investors didn’t pick our state-of-the-art regulatory framework.”
This content is sponsored by Consensus Hong Kong, taking place Feb.18-20.
