Regulators in Hong Kong are stepping up their game when it comes to monitoring the activities of the crypto industry.
According to a Securities and Futures Commission (SFC) report filed on Feb. 6, it plans to hire four additional staff to “better supervise” the activities of local virtual asset (VA) providers. Moreover, the extra oversight will help “better assess the compliance and risk” in allowing retail investors the opportunity to trade virtual assets on regulated platforms.
The commission wrote:
“This is in response to an increasing number of operators who have expressed interest in carrying on VA activities such as trading platforms and the management of VA funds.”
This comes at the onset of the introduction of a new licensing regime to allow greater retail crypto investment.
Previously trading platforms licensed in Hong Kong were only permitted to serve professional investors, or investors with portfolios of at least $1 million (HK $8 million), according to regulators.
Related: Hong Kong lawmaker wants to turn CBDC into stablecoin featuring DeFi
In December the new licensing regime was approved in the form of an amendment to the Anti-Money Laundering and Counter-Terrorist Financing Bill. However, it takes effect in June 2023, which has given time for regulators and local businesses to prepare for a new wave of participation in the industry.
Hong Kong has been active in its plan to revamp its crypto industry, in order to become a hub for Web3 innovation. A part of this plan included an investment fund of $500 million to push for mass adoption in the local industry scene.
Most recently, the Hong Kong Monetary Authority came out with a statement saying that it will not tolerate algorithmic stablecoins in its newest regulation. However, the regulator said that it intends to develop a full-bodied regulatory framework for stablecoins, which will be based on the full backing of such assets.