Hong Kong regulators have emphasized the importance of self-regulation within the crypto industry. They believe that economically developed regions often establish industry self-regulatory institutions to focus on industry development. To comply with this recommendation, crypto firms in Hong Kong may consider setting up a self-regulatory committee.
In a letter dated 22 April, the Hong Kong Securities and Futures Professionals Association (HKSFPA) expressed concerns about the lack of focus on industry development in the local financial services market. The administrative body highlighted the need for Hong Kong to maintain its competitiveness in the global securities market and consolidate its status as an international financial center.
To achieve this, the HKSFPA suggested that the Securities & Futures Commission (SFC), the city’s regulator, should establish statutory self-regulating and autonomous bodies. These bodies would delegate licensing powers to industry players, ensuring a balance between supervision and development.
The HKSFPA further proposed that the SFC should retain control over market conduct while transferring licensing authority to a securities industry composed of the futures industry, asset management industry, and virtual assets industry.
Unlike their global counterparts, Hong Kong regulators have been relatively lenient towards virtual asset firms. For example, on April 15, the SFC approved Bitcoin and Ether trading exchange-traded funds for issuers such as Harvest and Bosera. China Asset Management (ChinaAMC), a state-owned asset manager, also received approval. Additionally, OSL and Hashkey were granted official virtual dollar exchange licenses last year.
In contrast, the US Securities and Exchange Commission has yet to allow a spot Ether exchange-traded fund or grant licenses to exchanges beyond the three licenses available for cryptocurrencies. The progress in this area has been limited so far.