Legal
May has been a busy month for Hong Kong, as the city takes numerous steps toward becoming more crypto friendly.
Last month, Hong Kong’s financial secretary, Paul Chan Mo-po, said that Hong Kong is going to embrace regulation and promote development in the special administrative region.
“The virtual asset market has fluctuated greatly, and some virtual asset exchanges have closed down recently, which makes some people in the society doubt the prospects of Web3. However, we believe this is the right time to push Web3 forward,” he said in a blog post.
Here are the steps Hong Kong has taken so far:
A foray into the metaverse
Hong Kong’s Cyber Security and Technology Crime Bureau (CSTCB) launched the CyberDefender Metaverse, a platform dedicated to educating people on Web3 technology and the risks that come with it.
“The decentralized nature and use of virtual assets in Web3 may also increase the likelihood of cyber criminals targeting end point devices, virtual asset wallets and smart contracts,” the release said.
Police are concerned that technology, such as the metaverse, could lead to a rise in crime.
“In the first quarter of this year, Police received 663 cases of its kind with a total loss of $570 million,” the press release said.
In addition to the announcement, Hong Kong launched the CyberDefender website, which also allows people to input a URL, email or phone number enabling individuals to enter a URL, email, or phone number to search its database for any documented instances of previous fraudulent activities.
Hong Kong to lift crypto retail trading ban
The Securities and Futures Commission (SFC), Hong Kong’s securities regulator, ended its consultation period allowing industry stakeholders to provide feedback on issues.
The SFC said it received over 150 submissions, with most stakeholders “generally” welcoming the requirements proposed.
The regulator will begin to provide licensed virtual asset providers the right to offer services to retail crypto traders. The move marks a turn from last year when Hong Kong put the restrictions in place.
Changes will go into effect June 1, and smaller investors will be required to undergo investor training and awareness of exposure risks.
Crypto exchanges move to Hong Kong
Crypto exchanges have moved to take advantage of the more crypto-friendly environment, with a number seeking licensing in Hong Kong.
Huobi wants to provide crypto trading, including BTC and ETH.
Gate Group launched Gate.HK, which opened for registration and trading on May 23.
OKX offers its services to local traders via an exchange app. BitMEX’s platform also recently opened to users.
Hong Kong’s CBDC trial
And, finally, there’s the central bank digital currency trial currently happening in Hong Kong.
In mid-May, the Hong Kong Monetary Authority announced the trial run of the digital dollar which is called e-HKD or Cyber Hong Kong Dollar.
“By promoting cooperation between the government, industry and academia, we hope that research and development work can keep pace with the times,” Eddie Yue Wai-man, CEO of the HKMA, said in the statement.
Sixteen banks and payment companies were handpicked for the trial and will test out six potential use cases.
Hong Kong’s bank also helped to pen a paper on CBDCs which stated that ”some of the members of this group are approaching a point where they may decide on whether or not to move to the next stage of their CBDC work.”
