- Hong Kong regulator has asked financial experts to judge crypto services if they should continue in the region or not
- Traders will most likely can only trade cryptocurrencies with the largest market cap
- All crypto firms in Hong Kong may have to close down if they do not meet the regulations imposed there
Hong Kong may be at the forefront of Web3 projects today, but it has been strict on cryptocurrencies for the past few years. The banning of crypto led to a massive debate in the legislative department as some authorities asked to lighten the imposition of limited trading following the closing of FTX. This is because many investors in Hong Kong have already invested in unregulated exchanges and used offshore accounts. However, a regulator wants a final judgment regarding the fate of crypto in Hong Kong, whether trading will resume or be gone for good.
As for existing crypto exchanges in Hong Kong, they need approval from the local Securities and Futures Commission (SFC) on or before June 2024. Otherwise, the authorities will forcefully take down the unregistered firm.
The regulator has asked them to sign the official consultation titled “Consultation Paper on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the Securities and Futures Commission” to give them a chance.
According to reports, if the law happens to allow crypto trades again, only cryptocurrencies with the highest market caps will be available, while the obscure tokens will be removed.
Trading Ban Lift May Pave Way to Making HK a Web3 Mecca
The lifting of the ban on retail crypto trading has been hailed as a significant step forward for the Hong Kong government’s stance towards Web3 projects.
Hong Kong is already home to several leading blockchain projects, such as VeChain, Zilliqa, and Qtum. With the ban lifted, new digital asset trading platforms will become available in the region, allowing these projects to reach more people and increase their liquidity. This could significantly impact the development of Web3 projects in Hong Kong and turn it into a true hub for blockchain-based innovation and investment.
Moreover, with its solid legal infrastructure and financial sector, Hong Kong is poised to become an ideal landing spot for firms looking to capitalize on the burgeoning digital asset space – allowing them access to digital capital markets without operating in jurisdictions that need proper regulation or oversight. This could open up avenues for many Web3-based startups to find funding and continue building their projects in ways that were previously not accessible due to restrictions.
Hong Kong has been a significant player in the global cryptocurrency market, but the government needs to be more welcoming of the industry.
The Hong Kong Securities and Futures Commission, recently announced plans to lift its ban on retail crypto trading, signaling that the region is taking a more open stance towards crypto. This is an essential first step for Hong Kong in embracing the crypto space, with many expecting it to become a center for digital asset transactions and investments.