The Hong Kong Securities Regulator, the Securities and Future Commission (SFC), established a new orientation that would allow the exchanges and cryptography funds with license to offer bet services in the city.
A commitment offers cryptographic holders a way of putting their digital assets to work and obtain passive income without selling them. Bet is essential for the test of the stake networks (POS), since it provides security and immutability.
In a press release on Monday, the Securities and Future Commission (SFC) acknowledged that it can play the double role it can play, improving the safety of the Blockchain network and providing regulated performance generation opportunities for investors, since it continues to implement its broader strategy of the growing digital asset sector of Hong Kong through its “aspiration.”
“The expansion of the regulated services and products set is crucial to maintain the healthy advance of the Hong Kong virtual assets ecosystem,” said Julia Leung, executive director of SFC, in a statement. “But the extension must be carried out in a regulated environment where the safety of the client’s virtual assets continues to be in front and the center.”
In a circular that explains the rules around participation, the SFC said that virtual asset trade platforms (VATP), which is what the regulator calls licensed exchanges, must retain complete control of customer assets, explicitly prohibiting the subcontracting of the participation of a third party.
Platforms must also transparently reveal all associated risks, including potential vulnerabilities such as blockchain errors, piracy or validator inactivity.
Vatp, according to the rules, should clearly inform customers about the processes involved, rates, minimal blockage durations and arrangements for business continuity during interruptions.
Meanwhile, authorized virtual asset funds have the mandate to participate only through licensed platforms or authorized institutions, with a forced limit to manage liquidity risks, which further underlines the cautious approach but support of the regulator.
This is in contrast to Singapore, the rival financial center of Hong Kong in the region, which prohibited the retailer in 2023, citing the need for “investor protection.”
The United States Stock Exchange and Securities Commission (SEC) continues to restrict participation through compliance actions, although it faces increasing calls from a bipartisan group of senators to relieve its position.
Meanwhile, several states, including more recently, Illinois, have eliminated demands against Coinbase, which was first beaten with multiple demands in 2023.
