Hong Kong’s ambition to change into a crypto hub is probably not sustainable, in accordance with a Chinese language crypto veteran whose digital asset enterprise in China was overturned by a regulatory crackdown.
In an interview with Bloomberg, crypto pioneer Bobby Lee, who arrange China’s first Bitcoin trade and based US-based crypto storage supplier Ballet World, warned that Hong Kong could as soon as once more change its stance towards crypto in three to 5 years and announce a ban on the business.
The assertion comes as Hong Kong is set to issue crypto trade licenses beginning subsequent month.
Lee claimed that officers who let exchanges get hold of a license could have overblown expectations for connecting with mainland China as digital asset buying and selling stays banned in China.
“The fantasy for exchanges is pondering that if officers allow us to get a license, then perhaps they’ll begin a type of crypto-connect buying and selling hyperlink with mainland China.”
He added that he’s not blaming the Hong Kong authorities and that within the grander scheme of issues. “Hong Kong itself is a drop within the bucket,” he mentioned.
Hong Kong’s New Regulatory Regime to Take Impact Beginning June 1
Hong Kong’s securities watchdog has concluded its session paper on the proposed regulatory regime for crypto buying and selling platforms, which is ready to take impact beginning in June.
Below the brand new rulebook, the city-state will allow retail investors within the metropolis to commerce particular “large-cap tokens” on licensed exchanges, on condition that safeguards corresponding to data assessments, danger profiles, and affordable publicity limits are put in place.
The company can even begin offering licenses to crypto exchanges.
Nonetheless, it famous that the licensed platforms ought to “adjust to a variety of sturdy investor safety measures overlaying onboarding, governance, disclosure and token due diligence and admission, earlier than offering buying and selling companies to retail traders.”
The pivot to woo crypto companies is ostensibly Beijing-backed.
In the meantime, the brand new licensing regime continues to be imprecise on tips on how to deal with crypto derivatives, cryptocurrencies used for gaming, and utility cash.
The grey areas in addition to considerations across the sustainability of the brand new regulatory framework stay a serious concern.
“It’s tough for companies to have a five-year regulatory street map,” mentioned Lucy Gazmararian, founding father of web3 enterprise fund Token Bay Capital.
“Have it behind your thoughts, however actually plan for one to 2 years forward — as a result of look what occurred within the US with the crackdown on the sector.”
Hong Kong was previously a digital-asset hub however started to lose its place in mid-2022 amid growing concern concerning the metropolis’s regulatory ambiguity on crypto and the emergence of potential rivals like Singapore and Dubai which might be thought of extra pleasant to the crypto business.