Julia Leung Fung-yee, CEO of the Hong Kong Securities and Futures Commission (SFC), pointed out that crypto trading is an important part of the virtual asset ecosystem and touched on the regulations in Hong Kong after the collapse of FTX.
Leung stated in a recent speech that it was stated that the new licensing system for digital asset providers should take into account the protection of investors while taking into account the risks faced by financial institutions. According to the CEO, regulating digital asset providers was the only way to strengthen market confidence after FTX’s bankruptcy.
Hong Kong used the FTX crash to mitigate the regulatory risks associated with centralized exchanges. About a month after the crisis in November, the legislative council included digital asset service providers in the same legislation that governs traditional financial institutions.
According to Leung, Hong Kong’s cryptocurrency licensing system is an example of China’s one country two systems policy. Cryptos have been banned in China since 2021. However, Hong Kong follows the opposite policy. Over the past year, more than 150 web3 firms have established operations at Cyberport, a digital hub created by Hong Kong to foster innovation.