Hong Kong Plans Swift Action on Crypto Regulation

Hong Kong's finance chief announced plans to present regulation bills for stablecoins and over-the-counter (OTC) cryptocurrency trades to the Legislative Council promptly. The government aims to introduce licensing laws for stablecoin operations and OTC crypto trading following ongoing public consultations. Christopher Hui, the Secretary for Financial Services and the Treasury, mentioned in a Legislative Council response that public discussions were initiated this month for OTC crypto trading service licenses, concluding on April 12. Additionally, a separate consultation, ending on February 29, seeks to regulate stablecoin issuers, requiring them to be licensed by the Hong Kong Monetary Authority.

"Based on the feedback from these consultations and necessary preparatory steps, we will forward the bills on these licensing frameworks to the Legislative Council as soon as we can," Hui stated. Concerns over rising crypto crime have influenced this regulatory push. Hui highlighted a surge in crypto-related criminal activities, with cases jumping to 3,415 last year from 2,336 in 2022 and 1,397 in 2021.

The financial stakes in these crimes have also escalated, reaching around HK$4.4 billion ($562.6 million) in the previous year. Despite Hong Kong's ambitions to be a cryptocurrency hub, stringent regulatory measures are being enforced to eliminate fraudulent activities. Notably, the crackdown on the JPEX crypto exchange led to 70 arrests related to the platform by February 20, though no charges have been filed yet.