Hong Kong will now focus on regulating over-the-counter (OTC) cryptocurrency trading, according to local sources. Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim stated that the government will aim to mitigate the risks of virtual assets amidst the rising interest of mainland investors using the city as a bridge to invest in crypto assets.
Hong Kong to Push Stronger Regulation for Crypto OTC Desks
Hong Kong is preparing to strengthen its regulatory framework for over-the-counter (OTC) cryptocurrency operations. According to local reports, the decision has been influenced by the influx of Chinese mainland investors to the Hong Kong market who use the city as a bridge for these investments.
Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim stated that with these actions, Hong Kong authorities will aim to mitigate the potential risks of virtual assets while providing transparency for the users investing in these assets.
Earlier reports explained that Chinese investors were investing in cryptocurrency assets to escape the sluggish performance of the mainland national stock market. Reuters stressed these investors were using Hong Kong-based platforms to get around the ban that the mainland declared on the trading of crypto assets in 2021, using their $50,000 foreign currency quota for this objective.
Local sources did not specify if these new determinations for OTC markets were already prepared or still a work in progress.
In contrast to mainland China, Hong Kong has been open to cryptocurrency, with the Hong Kong Securities and Futures Commission (SFC) having recently published the norms that will regulate the future issuance of spot Bitcoin exchange-traded funds (ETF) in the country. The SFC recognized the popularity of virtual assets in the city and reported a high demand for instruments leveraging these virtual assets.