Amidst the recent scandal involving the cryptocurrency exchange JPEX, the Hong Kong government remains dedicated to advancing its Web3 vision for the region. Christopher Hui, the Secretary for Financial Services and the Treasury of Hong Kong, reassured the city’s commitment to developing the web3 market during a keynote address at Hong Kong Fintech Week on November 2.
Government’s Determination to Foster Growth in the Web3 Market
Hui emphasized that the controversy surrounding JPEX would not hinder the government’s determination to foster growth in the Web3 market. The JPEX scandal revolves around a financial fraud involving the Dubai-based exchange, accused of defrauding 2,500 locals, amounting to $213 million. The Securities and Futures Commission (SFC) issued a warning regarding JPEX’s services, prompting Hong Kong to tighten its cryptocurrency regulations.
The SFC has established a task force in collaboration with the police to combat illicit activities related to cryptocurrency exchanges. The regulatory body has also updated its policies regarding crypto sales and requirements. Hui stated that significant regulatory developments are on the horizon. As part of the government’s Web3 regulatory framework plan, the SFC will provide guidance on tokenized securities and the tokenization of SFC-authorized investment products. The scope of crypto regulations will expand to cover buying and selling activities beyond regulated trading platforms.
Joint Consultation on Stablecoins and Services to Crypto Companies
A joint consultation on stablecoins will be organized by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau. This consultation will gather feedback on a January HKMA discussion paper. Hui also revealed that the HKMA had encouraged banks to offer services to crypto companies earlier this year. Moving forward, the HKMA plans to consult with the sector on guidance for banks providing digital asset custodial services.
