As of 20 Feb 2023, Hong Kong has published requirements for trading platforms for Crypto currencies.
Till date, Crypto has not been accepted in many government bodies because it is decentralized and operates outside of the traditional financial system, which makes it difficult to regulate and control. Additionally, the anonymity and lack of transparency associated with crypto transactions can make it a popular tool for illicit activities such as money laundering, tax evasion, and terrorist financing, which can be a concern for governments. Furthermore, the volatility and lack of stability in the crypto market can also pose risks to the financial stability and security of a country. As a result, many governments have taken a cautious approach to crypto and have either outright banned it or implemented strict regulations to control its use.
Reports have also said that China's liaison office has been seen holding Crypto-related events in Hong Kong as the country receives soft backing from Beijing.
In Hong Kong, retail traders are now allowed to trade Bitcoin pairs (BTCUSDT) and other cryptocurrencies after the Securities and Futures Commission (SFC) announced new regulations. The new rules require that all cryptocurrency exchanges operating in Hong Kong apply for an SFC license and comply with anti-money laundering and counter-terrorist financing regulations. This move has been seen as a positive step towards mainstream adoption of cryptocurrency in Hong Kong, and is likely to encourage more retail investors to enter the market.
This move plans to dethrone Singapore as a Crypto Hub after the city withdrawing its step into the retail sector. Monetary Authority of Singapore (MAS) has seen taking tighter measures to crypto regulations after the fall of Singapore-based Terra. With Hong Kong's latest annual budget on Web3 at $6.4M, China background tokens like NEO saw an increase of 59%.
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