Despite mainland China’s strict regulations, Hong Kong has maintained a comparatively open stance toward cryptocurrencies. The SFC’s recent regulations on the issuance of Bitcoin ETFs reflect the city’s recognition of the demand for such virtual assets.
The FSTB’s proposed regulations aim to address risks by increasing transparency and protecting consumers within the OTC cryptocurrency market. Expected regulatory measures likely include:
Consumer Protection: Enforcing KYC procedures to consistently verify customer identities and prevent illegal activities.
Market Integrity: Establishing a regulated OTC market to maintain market integrity, attract institutional investment, and ensure transparency and fairness.
International Standards Alignment: Harmonizing Hong Kong’s crypto regulatory framework with international financial centers to bolster its reputation as a secure and trustworthy financial hub.
Fraud Prevention: Implementing regulations to prevent fraudulent activities and safeguard investors from being channeled into unlicensed trading platforms.
Clarity and Confidence: Providing legal certainty and clear guidelines for OTC stores and their customers, fostering long-term industry growth and consumer trust.