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Hong Kong Considers Self-Regulatory Committee For Crypto Compliance

Hong Kong officials are considering delegating crypto licensing powers to a self-regulatory committee

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The Hong Kong Securities & Futures Professionals Association (HKSFPA) is considering a self-regulatory committee to oversee compliance in its crypto industry.

“Many economically developed regions in the world have established statutory semi-official industry self-regulatory institutions to focus on industry development,” Hong Kong regulators said.

HKSFPA highlighted how there is no organization dedicated to the development of Hong Kong’s financial market industry and that current regulatory practices focus on supervision rather than coordination.

The officials proposed that the Securities & Futures Commission (SFC) could oversee market conduct but could also entrust industry players with its licensing authority.

Additioanlly, HKSFPA proposed the creation of a self-regulatory body comprised of representatives from the futures, asset management, and virtual asset sectors.

However, the effectiveness of self-regulation is questionable. Lithuania, which practised self-regulation, is now backpedalling to tighten its framework from 2025 onwards after granting 580 crypto licenses with limited oversight.

Hong Kong has been pushing policies to benefit the crypto industry. Most recently, Hong Kong police arrested 72 people in connection with the JPEX scandal, which marked the city's biggest case of financial fraud. Three people were also arrested for their involvement in a HK$1.8 billion money-laundering scheme.

Hong Kong Arrests 72 in JPEX Scandal, 3 in HK$1.8bn Crypto Money Laundering Scheme
Hong Kong might be proud of its pro-crypto stance, especially after greenlighting Bitcoin ETFs, but the city continues to be plagued with crypto scams and money launderers

OSL also suggested Chinese firms that received the green light for Bitcoin ETFs in Hong Kong, such as China Asset Management, HashKey Capital Limited and Harvest Global Investments, might debut their products in April.

The Hong Kong Securities and Futures Commission (SFC) officially approved several spot Bitcoin and Ethereum exchange-traded funds (ETFs) earlier this month.

OSL Says Hong Kong Bitcoin ETFs Could Debut This Month
OSL revealed that Bitcoin ETFs in Hong Kong could start in late April and Ethereum ETFs “shortly after”