Hong Kong Authorities Condemn The Usage Of Foreign Exchange
- Hong Kong regulators and policymakers are not happy with foreign crypto exchanges being used in the nation by crypto investors
- The lawmakers criticized this activity stating that such exchanges are regulated in foreign lands and not in the country
Hong Kong lawmakers criticized many citizens for registering and trading cryptocurrencies on foreign platforms that are not regulated by the government. Officials responded that international cooperation needs to be strengthened, but related investment activities should not be banned.
Hong Kong policymakers have recently shown their concerns over the use of unregulated foreign exchange platforms by the citizens for registering and trading cryptocurrencies.
The Hong Kong government has tightened its supervision of digital assets due to concerns regarding the cryptocurrencies used for illicit activities like money laundering and terrorist funding. The Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, which was read by the Legislative Council earlier, requires those involved in operating crypto exchanges to apply for a license from the Securities and Futures Commission. The decision aimed to strengthen Hong Kong’s regulatory regime to fight against these illicit activities.
During the draft committee on July 29, some members raised their concerns about the draft failing to regulate digital asset platforms registered in foreign nations. Multiple members also proposed strengthening investor education.
Lu Hanmin, one of the congressmen, pointed out that many citizens are using mobile phones to invest in crypt assets on platforms registered in foreign countries. As a result of this, the authorities are finding it difficult to track and supervise such investments. Moreover, Hanmin also said that the draft pushes ordinary investors to use foreign registered platforms and only regulates professional investors.
Agreeing with Hanmin’s points, Deputy Secretary for Financial Services and the Treasury, Chen Ying-Shao, said that Hong Kong is “advanced” in the licensing and registering system of the virtual asset market. Chen further added that most foreign countries are currently only in the registration system, and Hong Kong would potentially receive international cooperation in the future.
Another respondent, Zhou Haoding, said that Western nations are “relatively loose” in their regulation of the crypto market and that the devaluation of virtual currencies has previously taken place, resulting in significant losses for investors. He made a note of how, in contrast, rules in other countries are not as strict, and investors may choose to engage in relevant markets for virtual currencies. Zhou raised questions on whether the government will consider raising transaction costs to alert investors to the risks involved.
On the other hand, China has become a cult and motivation for countries seeking crypto ban for its massive crackdown on the crypto industry, banning crypto trading, mining, or any related activity in the nation.