The Hong Kong Securities & Futures Professionals Association (HKSFPA) has advised the city’s crypto industry to establish a self-regulatory committee.
“In an April 22 recommendation letter, the HKSFPA stated, “The Hong Kong financial market industry is overly focused on supervision, but there is no organization to maintain the industry’s overall development.”
The administrative body then emphasized that Hong Kong must “consolidate its status as an international financial center” and maintain its competitiveness in the global securities market.
The HKSFPA suggested that the Securities & Futures Commission (SFC), the city’s regulator, construct “statutory self-regulating” and autonomous bodies that would delegate licensing authority to industry participants:
“In the case of Hong Kong, the Commission recommends that the Securities and Futures Commission still retains the power to supervise market conduct, but splits the licensing power to solely the securities industry, A self-regulatory institution composed of the futures industry, asset management industry and virtual asset industry.”
The HKSFPA, in a similar letter of recommendation from August of last year, advocated for “balanced development and supervision” to prevent the Hong Kong virtual assets industry from “veering into the extreme direction of supervision.”
However, the risk-reward relationship associated with self-regulation is only sometimes balanced.
Commencing in 2025, Lithuania is implementing more stringent crypto regulations in response to allegations of non-compliance and embezzlement. The Baltic state that has granted licenses to over 580 cryptocurrency firms exerts minimal oversight over its licensees.
On the other hand, Hong Kong regulators have been considerably more tolerant of virtual asset firms than their international counterparts.
The SFC approved on April 15 exchange-traded funds that track spot Bitcoin and Ether for issuers, which included Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC). Last year, the regulator granted official virtual asset licenses to Hashkey and OSL, two cryptocurrency exchanges.
Meanwhile, the U.S. Securities and Exchange Commission has yet to grant registration licenses for spot Ether ETFs or authorized crypto exchanges to do so. Additionally, the current outlook for their approvals is bleak.
