cryptonewsz.com
Amidst ambiguous regulatory environments that threaten the United States’ position as a crypto hub, Hong Kong may become a global nexus for digital assets.
The Securities and Futures Commission (SFC) of Hong Kong has drafted rules for trading platforms that digital assets and is seeking public feedback by March 31. A finalized set of regulations is expected to take effect on June 1. For most of last year, the SFC didn’t appear interested in granting retail investors access to crypto under its virtual asset licensing framework. At Hong Kong FinTech Week in November 2022, however, it signaled a willingness to change course.
The regulator is seeking opinions on whether licensed platforms can serve retail investors and what investor protection measures should be in place. It is advised that crypto trading platforms planning to become licensed in Hong Kong review and revise their systems and controls. In contrast, those without plans to apply should prepare for an orderly closure of their Hong Kong operations.
With Hong Kong taking the lead, the new crypto regulations may provide a model for other countries to follow, leading to more favorable conditions for digital asset trading worldwide.
Notably, the 2022 Worldwide Crypto Readiness Report ranked Hong Kong as the most crypto-ready location, followed by Switzerland and the United States. Hong Kong ranked first in several categories, including the number of blockchain startups per 100,000 residents and the number of cryptocurrency ATMs per capita. This, coupled with the fact that Hong Kong has no capital gains tax on crypto, makes it an ideal destination for investors and entrepreneurs looking to capitalize on the many opportunities the cryptocurrency industry offers.
A Hong Kong news outlet reported that ChangeNOW, a non-custodial crypto platform, would seek a license from the SFC to continue providing secure, compliant crypto exchange services in Hong Kong and promote cryptocurrency adoption there.
According to ChangeNOW, its Hong Kong user numbers surged by 62% in February.
In addition, it revealed that Hong Kongers are most interested in TRON-based stablecoin USDT TRC20 and Polygon-based USDC, as well as the Shiba Inu (SHIB) altcoin.
Major reasons for this growth may be Hong Kong users’ growing interest in cryptocurrencies as well as custody-free access to digital assets offered by ChangeNOW – especially in the wake of the recent FTX scandal, which brought awareness to the risks associated with centralized exchanges, prompting users to switch to platforms that do not hold users’ assets in custody.
Other exchanges lined up to launch SFC-compliant crypto trading operations in Hong Kong include Huobi Global, OKX, and Gate.io.
Using its anti-money laundering and risk-prevention mechanisms, ChangeNOW has successfully recovered roughly $20.5 million lost to hacks and fraud, proving its ability to keep bad actors at bay. This is akin to a well-maintained security system in a physical building, which guards against outside intrusion and helps give the people inside a sense of safety and security. When it works as it should, it can be a powerful deterrent to malicious actors and bring peace of mind to the people inside.
ChangeNOW made headlines in late 2021 by returning over $15 million in crypto to Compound, which lost over $89 million due to an internal error. In the most recent testament to ChangeNOW’s unwavering commitment to safeguarding the crypto community, its AML system prevented $1.5 million from being lost during the massive attack on Algorand wallets.
ChangeNOW’s success in combating fraudulent activities can inspire other crypto industry participants to create a safer user environment.