The head of Hong Kong‘s finance department declared that the Legislative Council would receive bills regulating over-the-counter (OTC) crypto trading and stablecoins as soon as possible.
After public consultations, the government intends to introduce licensing laws for OTC crypto trading and stablecoin operations.
Public talks regarding licenses for OTC crypto trading services were started this month and will end on April 12, as per a response from Christopher Hui, the Secretary for Financial Services and the Treasury, in a response to the Legislative Council.
In addition, a different consultation that ends on February 29 aims to regulate stablecoin issuers by requiring the Hong Kong Monetary Authority to grant them a license.
“Based on the feedback from these consultations and the necessary preparatory steps, we will forward the bills on these licensing frameworks to the Legislative Council as soon as we can,” Christopher Hui said.
This legislative drive has been influenced by worries about the increase in cyber attacks. Furthermore, he drew attention to an increase in criminal activity involving crypto, with cases rising to 3,415 last year from 2,336 in 2022 and 1,397 in 2021.
The stakes in terms of money have also increased, with an estimated HK$4.4 billion worth around $562.6 million at risk in these crimes last year.
Strict regulations are in place to stop fraudulent activity, even though Hong Kong wants to be a center for crypto.
Notably, by February 20, 70 people had been arrested in connection with the JPEX crypto exchange; however, no charges had been brought as of yet.
James Wilson is a crypto writer and researcher with over 5 years of experience in the industry. He is a graduate of the University of California, Berkeley, where he studied computer science and economics. After graduating, he worked as a software engineer at a major tech company before transitioning to a career in crypto.
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