The Hong Kong Securities & Futures Professionals Affiliation (HKSFPA) advocated establishing a self-regulatory committee inside the metropolis’s crypto corporations to reinforce compliance monitoring on April 22.
“Many economically developed areas on this planet have established statutory semi-official {industry} self-regulatory establishments to deal with {industry} improvement,” Hong Kong regulators wrote.
HKSFPA Requires Trade-Led Licensing Authority in Hong Kong’s Monetary Market
In a suggestion letter, the HKSFPA highlighted the absence of an overarching group to foster the event of Hong Kong’s monetary market {industry}. It criticized the present regulatory panorama as overly centered on supervision with out enough mechanisms for industry-wide coordination.
Highlighting the significance of Hong Kong sustaining its competitiveness within the international securities market and solidifying its place as a world monetary middle, the HKSFPA advised the Securities & Futures Fee (SFC) delegate licensing powers to {industry} gamers.
Particularly, it proposed that the SFC retain supervision over market conduct whereas granting licensing authority solely to the securities {industry}. Moreover, the advice emphasised the institution of a self-regulatory establishment comprising representatives from the futures, asset administration, and digital asset industries.
This proposal aligns with the HKSFPA’s earlier suggestion final August, which confused balancing supervision and improvement to forestall the Hong Kong digital property {industry} from being excessively regulated.
The efficacy of self-regulation in sustaining a balanced risk-reward dynamic is a topic of debate, nonetheless, as evidenced by current developments in Lithuania. The Baltic nation, grappling with compliance failures and embezzlement in its crypto sector, is tightening its regulatory framework beginning in 2025, regardless of initially granting licenses to over 580 crypto corporations with restricted oversight.
In distinction, Hong Kong regulators have exhibited higher tolerance in the direction of digital asset corporations, as demonstrated by the SFC’s current approvals of spot Bitcoin and Ethereum ETFs. Final yr, the regulator issued official digital asset licenses to crypto exchanges corresponding to Hashkey and OSL, signaling a comparatively accommodating stance in the direction of the {industry}.
Hong Kong Anticipated to Approve First Batch of Spot Bitcoin ETFs
The Hong Kong Securities and Futures Fee (SFC) authorised the primary batch of spot Bitcoin ETFs on April 15. Following this approval, the Hong Kong Inventory Change (HKEX) would require roughly two weeks to finalize itemizing procedures and different preparations.
Hong Kong’s securities regulator points conditional authorization letters to ETF purposes that usually meet its necessities, topic to varied circumstances corresponding to price funds, doc submitting, and HKEX’s itemizing approval.
MASSIVE BITCOIN SUPPLY SHOCK 🔥
Right here’s why:
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miners can now solely produce a max
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buying and selling very quickly.✅Australia…
— Ash Crypto (@Ashcryptoreal) April 22, 2024
The authorised spot Bitcoin and Ether ETFs launched as in-kind ETFs, permit new ETF shares to be issued utilizing BTC and ETH. This mannequin contrasts with the cash-create redemption mannequin, the place new ETF shares are created solely with money. In the USA, spot Bitcoin ETFs at present use the cash-create mannequin.
Whereas the approval has garnered reward from many within the crypto group, together with native Hong Kong exchanges, some specific skepticism concerning the ETFs’ success inside the area.
“Mainland China buyers in all probability received’t be eligible to purchase Hong Kong-listed spot Bitcoin and Ether ETFs as they’re barred from shopping for digital property,” Bloomberg ETF analyst Eric Balchunas said in an April 17 submit on X.