Hong Kong Unveils New Regulations for OTC Crypto Platforms

The Financial Services and Treasury Bureau (FSTB) in Hong Kong has announced new regulations for over-the-counter (OTC) crypto trading platforms.

These rules are meant to open the market for digital assets and protect investors from fraud. This action shows that the region is dedicated to keeping an eye on a place that has become easier for everyone to get to.

Safeguarding Crypto Investors and Enhancing Market Integrity

Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, highlighted the importance of quickly regulating over-the-counter (OTC) businesses. These services pose concerns and risks due to their involvement with virtual asset (VA) trade platforms. 

In a public statement, he said he was worried: “OTC venues have played a part in some of the fraud cases involving unlicensed VA trading platforms, having misled investors into sending money to these unlicensed platforms.”

The suggested framework for regulations will soon be made public for public comment. Its goal is to create a complete and widely consistent set of rules for over-the-counter (OTC) markets. This will ensure crypto investors are in a “regulated and monitored” environment. The change should bring these sites up to speed with the best practices used worldwide, making trading safer and more fair overall.

Hong Kong’s Securities and Futures Commission (SFC) recently took steps to ensure retail investors could safely join the crypto market. This new regulatory effort comes after these measures were taken. HashKey, a local exchange, was improved to offer regulated crypto services to retail investors who follow the updated regulations.

Hong Kong is also setting itself up to be the Asia-Pacific region’s main hub for digital assets. Recently, the city thought about letting retail investors put in spot crypto exchange-traded funds (ETFs). This became a reality when the government announced it was ready to accept applications for spot crypto ETFs. The decision came after the US Securities and Exchange Commission (SEC) approved several spot BTC ETF applications.

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