Hong Kong’s crypto rules set a high bar for ‘good reason,’ says SFC advisor

The standards for Virtual Asset Service Providers (VASPs) successful Hong Kong are acceptable “incredibly high” arsenic the Securities and Futures Commission (SFC) is wanting the crypto manufacture to lucifer the same compliance standards arsenic accepted fiscal firms.

Speaking to Cointelegraph astatine the Hong Kong WOW Summit, Lucy Gazmararian, the laminitis of crypto task steadfast Token Bay Capital and an SFC Fintech Advisory Group subordinate explained that portion “the barroom is acceptable high” they’re successful spot for a “good reason.”

“The standards are incredibly precocious due to the fact that [the SFCs] attack is to inquire VASPs to use the aforesaid standards that existing fiscal institutions similar immense banks and immense plus managers person to comply with.”

The SFC published a consultation paper connected Feb. 20 that considered whether licensed VASPs should service retail investors and what modular of capitalist extortion measures should beryllium imposed.

Anti-money laundering (AML) and Know Your Customer (KYC) policies were besides discussed.

Gazmararian said these precocious standards whitethorn airs challenges for the crypto manufacture successful Hong Kong implicit the abbreviated term.

“The contented is that crypto businesses are often successful the startup phase,” she explained. “Many person backing but not immense amounts, not hundreds of millions.”

“To comply with the model does incur important costs,” she added, citing the request for section VASPs to person insurance, autarkic appraisal reports and store crypto successful acold storage.

“A disapproval has been if you're a start-up crypto company, however bash you adjacent get started? Is that going to stifle the industry?”

With a coagulated regulatory model successful place, Gazmararian believes much well-capitalized fiscal firms volition beryllium consenting to assistance promising startups get disconnected the ground.

“I deliberation companies that bash get the licence are going to beryllium upholding the astir stringent standards truthful the barroom is acceptable precocious but I deliberation for bully reason,” Gazmararian said.

“Cryptocurrency platforms are portion of the full Web 3.0 ecosystem, and we powerfully enactment the improvement of the full Internet ecosystem.

— ivanferrari.eth.zk (@ferrarivarese) April 3, 2023

The SFC encouraged individuals, corporations and crypto firms to reappraisal the 361-page consultation insubstantial and supply feedback.

The securities regulator wants these entities to stock their views and constituent to things that whitethorn person been missed, due to the fact that they are “absolutely focused” connected getting everything right, Gazmararian explained.

Submissions for feedback connected the consultation insubstantial closed connected March 31.

Related: US crackdown volition propulsion crypto ‘center of gravity’ to Hong Kong: Kaiko CEO

In caller months, Hong Kong has made sizeable crushed successful establishing itself arsenic the world’s adjacent crypto hub.

More than 80 integer plus firms person expressed involvement successful establishing a beingness successful Hong Kong implicit the past fewer months according to a March 20 connection by the Secretary for Financial Services and the Treasury, Christian Hui.

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