Crypto Trading Crucial to Virtual Asset Ecosystem, Says Hong Kong SFC Chief
Cryptocurrency trading is an important part of the virtual asset ecosystem, according to Julia Leung Fung-yee, CEO of the Securities and Futures Commission (SFC) of Hong Kong.
In a recent speech, Leung said the city-state recognizes the importance of crypto trading, adding that it welcomes the application of related technologies to financial services, including bond tokenization and investment funds.
The CEO also mentioned that Hong Kong's embrace of Web3 regulation has been crucial to the development of its virtual asset ecosystem following the collapse of the crypto exchange FTX in November 2022.
She outlined how the new licensing system for virtual asset providers would ensure that investors are protected while considering the risks that financial institutions face.
Incorporating virtual asset providers into the regulatory system, in her view, was the only way to embrace innovation and strengthen market trust after FTX’s bankruptcy.
Following the collapse of FTX, Hong Kong started taking measures in a bid to reduce regulatory risks associated with centralized exchanges.
In December 2022, its legislative council included virtual asset service providers in the same legislation governing traditional financial institutions.
Furthermore, the city's financial regulator implemented its new regulatory framework for crypto on the first of June.
The new rules introduce strict Anti-Money Laundering guidelines and investor protection laws to digital asset exchanges looking to open a business in Hong Kong.
It also allows retail investors the ability to trade virtual assets, instead of restricting digital assets trading to professional investors and traders with at least $1 million in bankable assets.
Earlier this month, the Hong Kong
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