Julia Leung Fung-yee, CEO of Hong Kong’s Securities and Futures Commission (SFC).mentionedHong Kong’s adoption of Web3 regulation following the collapse of FTX in November 2022, stating that crypto trading is an integral part of the virtual asset ecosystem.
During his speech, Leung reportedly explained that the new licensing system for virtual asset providers will ensure that investors are protected while taking into account the risks facing financial institutions. in her view Integrating virtual asset providers into the regulatory system is the only way to embrace innovation and foster trust in the market after FTX’s bankruptcy.
In December 2022, less than a month after the FTX crisis, the legislature consolidated virtual asset providers into the same law that governs traditional financial institutions.
The new rules bring strict anti-money laundering guidelines and investor protection laws to crypto exchanges looking to open a business in Hong Kong. It also introduced a new licensing model that allows retail investors to trade virtual assets. which was before Digital asset trading is restricted to professional investors and traders with at least $1 million in banking assets.
According to Leung, the authorization of cryptocurrencies Hong Kong’s is a good example of China’s “one country, two systems” policy. It has been banned in mainland China since 2021, while Hong Kong takes a different approach by promoting a hostile environment for the crypto industry.
Over the past 12 months, more than 150 Web3 companies have set up operations in Hong Kong’s Cyberport, a digital hub built by the local government to foster innovation. The massive influx came after the government allocated 50 million yuan ($7 million) to speed up Web3 development.
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