Hong Kong is exploring whether to have the Securities and Futures Commission (SFC) involved in regulating over-the-counter (OTC) virtual asset trading services, along with the Customs and Excise Department (C&ED), as the city struggles to regulate the industry.
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The SFC has sought opinions from industry players about potentially putting in place a new licensing regime for cryptocurrency OTC services, which will see the securities regulator work with the C&ED to oversee these companies, according to people familiar with the matter who declined to be named because the discussions were private.
Planned OTC regulations and licensing were previously the sole domain of the C&ED under a proposal made public in February. OTC services facilitate direct and private large-volume cryptocurrency transactions between two parties.
The SFC has also consulted companies in recent months about introducing a new licensing regime for cryptocurrency custodian services, the people said. Discussions about both licences are still in the early stages and are subject to change, they said.
“To foster the sustainable and responsible development of the virtual assets industry in Hong Kong, the SFC works closely with the government and other regulators in developing a robust, clear and consistent regulatory environment in Hong Kong,” an SFC representative said in a statement on Wednesday.
