Hong Kong to Consult on Regulatory Framework for OTC Crypto Venues

According to CoinDesk, Hong Kong plans to begin consultations on a regulatory framework for over-the-counter (OTC) crypto venues very soon. The Financial Services and the Treasury Bureau (FSTB) stated in a blog post that the consultation will cover virtual-asset (VA) outlets, including shops and online platforms. The FSTB noted that OTC venues played a role in some fraud cases involving unlicensed VA trading platforms last year, misleading investors to channel funds to these unlicensed platforms. As a result, the FSTB believes it is necessary to bring OTC venues under regulation and will launch a consultation on the proposed regulatory framework. In October, the bureau expressed its desire to develop a vibrant sector and ecosystem for virtual assets, following efforts to regulate the sector in recent years. A licensing regime for crypto companies was established in June last year, with companies required to receive approval before June this year to continue operating in the country. Additionally, Hong Kong is consulting on a regulatory regime for stablecoin issuers, which would require fiat-backed stablecoin issuers to obtain a license from the Hong Kong Monetary Authority.