Requirements for digital asset service suppliers (VASPs) in Hong Kong have been set “unprecedentedly excessive” because the Securities and Futures Fee (SFC) desires the crypto business to match the identical compliance requirements as conventional monetary corporations.
Chatting with Syntelegraph on the Hong Kong WOW Summit, Lucy Gazmararian, founding father of crypto enterprise agency Token Bay Capital and a member of the SFC FinTech Advisory Group, defined that whereas “the bar is excessive” they’re within the place “for good purpose”. “
“The requirements are extremely excessive as a result of [the SFCs] The method is that VASPs are requested to use the identical requirements that incumbent monetary establishments resembling giant banks and huge asset managers should adhere to.”
The SFC revealed a session paper on 20 Feb that thought-about whether or not licensed VASPs ought to serve retail traders and what requirements of investor safety measures ought to be imposed.
Anti Cash Laundering (AML) and Know Your Buyer (KYC) insurance policies have been additionally mentioned.
Gazmerian mentioned these excessive requirements may pose challenges for the crypto business in Hong Kong within the brief time period.
“The issue is that crypto companies are sometimes within the startup part,” she defined. “Lots of people have funds however not enormous quantities, not tens of millions.”
“Complying with the framework incurs important prices,” she added, citing insurance coverage for native VASPs, unbiased evaluation studies and the necessity to retailer crypto in chilly storage.
“A remark has been made that in case you are a start-up crypto firm, how do you get began? Will it stifle the business?”
With a stable regulatory framework, Gazmararian believes higher capitalized monetary corporations might be keen to assist promising startups get off the bottom.
“I feel the businesses that get licensed are going to take care of the strictest requirements so the bar is about excessive however I feel for good purpose,” Gazmararian mentioned.
“Cryptocurrency platforms are a part of your complete Internet 3.0 ecosystem and we strongly assist the event of your complete Web ecosystem.
— ivanferrari.eth.zk (@ferrarivarese) April 3, 2023
The SFC inspired people, firms and crypto corporations to evaluation and supply suggestions on the 361-page session paper.
Securities regulators need these establishments to share their views and level out misses, as they’re “completely targeted” on getting all the pieces proper, Gazmararian explains.
Submissions for suggestions on the session paper closed on 31 March.
Associated: US crackdown will push crypto ‘middle of gravity’ to Hong Kong: Keiko CEO
In latest months, Hong Kong has made important floor to ascertain itself because the world’s subsequent crypto hub.
Greater than 80 digital asset corporations have expressed curiosity in establishing a presence in Hong Kong previously few months, in accordance with a March 20 assertion by Monetary Providers and Treasury Secretary Christian Hui.
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