Hong Kong, Tuesday, April 23, 2024 – Hong Kong’s push to become a global center for digital assets is facing headwinds as its newly proposed cryptocurrency regulations raise concerns from industry players.
Livio Weng, CEO of HashKey Exchange, one of Hong Kong’s two licensed crypto exchanges, criticized the regulations for potentially limiting access to international investors, the Financial Times reported on April 12. 1
He fears this could stifle Hong Kong’s ability to compete with other crypto-friendly hubs like Singapore.
These concerns echo a broader sentiment of uncertainty. The recent sale of a significant stake in OSL, the other licensed exchange, to an unlicensed crypto group with alleged China ties has cast doubt on the long-term viability of operating under the current regulatory framework.
Despite these anxieties, a fierce competition has emerged for the limited number of available licenses. Companies are drawn to the prestige of being regulated by Hong Kong’s reputed Securities and Futures Commission, even with the limitations on who can participate in the market.
However, industry insiders warn that the limited size of Hong Kong’s market (around 8 million people) could be a challenge.
Analysts like Jason Chan of Howse Williams predict that only a fraction of the applicants will ultimately receive licenses, further intensifying the competition and driving up fees for legal and consulting services.1
While the regulations on exchanges have drawn criticism, Hong Kong authorities said that they remain committed to fostering a broader crypto ecosystem. King Leung of Invest Hong Kong emphasized the city’s focus on attracting market makers, tech developers, and other players beyond just exchanges.
- Hong Kong’s Crypto: https://www.ft.com/content/41651975-4eca-4d6f-8ca2-d17aaf175a2f[↩][↩]
