The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) are poised to review requirements for virtual asset-related activities. This initiative addresses lawmakers’ queries about expediting the crypto licensing process and easing distribution rules for intermediaries.
Licensed Distribution of Crypto Products
Hui emphasized that licensed corporations or registered institutions are authorized to distribute crypto-related products upon notifying regulators, without needing to alter their licensing conditions. This announcement comes at a critical time, especially after several global exchanges, including OKX, Gate.io, and HTX, withdrew their license applications in May to comply with a strict deadline set by the SFC.
Capital Investment Entrant Scheme Success
Hong Kong’s revamped Capital Investment Entrant Scheme (CIES) has attracted significant global investment. Since its launch on March 1, Invest Hong Kong (InvestHK) has processed over 300 applications. The Immigration Department has granted “approval in principle” to 80 applicants, allowing them to invest in the area. The scheme now offers greater flexibility in demonstrating financial capability, requiring applicants to showcase a minimum net worth of HK$10 million, maintained over the past two years.
Wealth Management Connect Scheme (WMC 2.0)
The updated Wealth Management Connect Scheme in the Greater Bay Area (GBA), known as WMC 2.0, continues to provide enhanced opportunities for investors and brokerage firms. Since its inception in February 2024, WMC 2.0 has raised the individual investment quota and lowered entry requirements for brokerage firms, facilitating smoother financial exchanges across borders. The SFC, in collaboration with the China Securities Regulatory Commission, is working to integrate more brokerage firms into this initiative.
Regulatory Landscape for Virtual Assets
Hong Kong’s regulatory bodies, the SFC and HKMA, have refined the regulatory landscape for the virtual assets (VA) sector. A joint circular issued in December 2023 requires intermediaries planning to engage in VA activities to notify the SFC and HKMA in advance. This streamlined approach aims to foster a more accommodating environment for crypto-related businesses.
Hong Kong’s ongoing regulatory updates reflect a commitment to fostering a conducive environment for virtual assets and investment activities. By reviewing and adjusting the crypto licensing and distribution rules, the HKMA and SFC aim to balance regulatory oversight with market growth, attracting global investments and enhancing financial connectivity within the region.
