Hong Kong to Consult on Regulation for OTC Crypto Venues 'Very Soon'

The Financial Services and the Treasury Bureau will consult on over-the-counter venues like shops and online platforms following the outlets' role in crypto fraud cases.

AccessTimeIconFeb 2, 2024 at 12:17 p.m. UTC
Updated Mar 8, 2024 at 8:57 p.m. UTC

Hong Kong said it plans to consult on a framework for over-the-counter (OTC) crypto venues and will start the process "very soon."

The consultation will cover virtual-asset (VA) outlets such as shops and online platforms, the Financial Services and the Treasury Bureau (FSTB) said in a blog post on Friday.

"In fact, OTC venues have played a certain role in some of the fraud cases involving some unlicensed VA trading platforms last year, having misled investors to channel funds to these unlicensed platforms," the FSTB said. "Therefore, we believe that it is necessary to bring OTC venues under regulation, and we will launch a consultation very soon on the proposed regulatory framework."

In October, the bureau said it wanted to develop a "vibrant sector and ecosystem" for virtual assets following efforts to regulate the sector in recent years. It set up a licensing regime for crypto companies that kicked in in June last year, and companies will need to receive approval before June this year to continue operating in the country.

Hong Kong is also consulting on a regulatory regime for stablecoin issuers. The proposed regulatory system would require fiat-backed stablecoin issuers to obtain a license from the Hong Kong Monetary Authority.

Edited by Sheldon Reback.


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Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.