​​JPEX scandal won’t hurt Hong Kong crypto vision: Financial Secretary

JPEX scandal won’t hurt Hong Kong crypto vision: Financial Secretary

November 2, 2023 Coin Telegraph

Christopher Hui took the stage at Fintech Week and outlined a list of regulatory moves Hong Kong authorities are looking to implement following the JPEX scandal.

The Hong Kong government says the recent $165 million alleged scandal involving crypto exchange JPEX won’t stifle its Web3 vision for the region.

In a Nov. 2 keynote at Hong Kong Fintech Week, the region’s Secretary for Financial Services and the Treasury Christopher Hui said the saga hasn’t affected the government’s plan.

“We’ve been asked many times whether JPEX will affect our determination to grow the Web3 market — the answer is a clear ‘no.’”

Hui was referring to the financial scandal involving the Dubai-based exchange JPEX, where 2,500 locals allege they were allegedly defrauded, prompting the Securities and Futures Commission (SFC) to warn that JPEX was promoting its services locally without a license.

Hong Kong said it would tighten its crypto regulations after JPEX’s alleged actions. Additionally, the SFC set up a task force with the police to deal with illicit crypto exchange activities and updated its policies on crypto sales and requirements.

Hui said “a lot of things are going on on the regulatory front” — part of the government’s future Web3 regulatory framework plan sees the SFC issuing guidance on tokenized securities and the tokenization of SFC-authorized investment products.

*Hui discusses the government’s plans for its Web3 regulatory framework. (Cointelegraph/Tom Mitchelhill)*

Crypto regulations will also be expanded to cover buying and selling “beyond trades taking place on now-regulated trading platforms,” Hui said.

A “much sought after” joint consultation on stablecoins by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau is also set to drop soon, which will take feedback from a January HKMA discussion paper.

Reports earlier this year said the HKMA pressured banks to provide services to crypto companies in the religion. Hui said the HKMA will consult the sector on guidance for “banks providing digital asset custodial services.”

Magazine: Chinese police vs. Web3, blockchain centralization continues: Asia Express

Rush for Hong Kong’s crypto licenses yet to translate to jobs: Recruiters

July 9, 2023 Coin Telegraph

Coin Telegraph

Hundreds of firms have been lining up for a Hong Kong crypto license, but recruiters say they are yet to see an accompanying rush for talent.

Crypto firms may appear to have been prepping entry to Hong Kong with unabated excitement, but it’s yet to translate into in-country hires, according to recruitment executives.

On June 1, around 150 companies lined up for a local crypto license which permits the operation of a local crypto trading platform. Some have reportedly even spent up to $25 million to nab one.

Speaking to Cointelegraph, Sue Wei, managing director of major recruitment firm Hays, said that while exchanges have been seeking to build a base in Hong Kong, the industry’s recruitment needs “are light as of now.”

“Many Web3 companies are still in the early stages of development, but we anticipate an increase in openings as they continue to scale up and mature.”

In fact, Wei said that since the dip in the crypto market, her firm has seen a “significant decrease in requests for recruiting technical talent.”

This was particularly the case when talent was “laid off en masse,” which made some hesitant toward working at a crypto company “due to the unstable nature of the business that mainly relies on the prices of crypto,” she said.

Similarly, crypto recruiter Cryptorecruit founder Neil Dundon said he hasn’t “really noticed much going on in Hong Kong.”

“Even though rules have changed, venture activity is extremely low right now,” he said. “Although it feels like we have bottomed, and I expect this to start trending upward from here.”

Michael Page Hong Kong’s managing director, Olga Yung, also said she’s yet to see “a significant increase” in those looking for jobs in Web3 despite the government’s recent push.

However, Yung noted a “slight uptick” in Web3 firms seeking “legal and compliance hires” in mid to late Q2 2023.

Talent war is coming

Looking ahead, Kevin Gibson, founder of Web3 recruitment firm Proof of Search, told Cointelegraph it could take six months for crypto talent to surge into the region as companies wait for license approvals.

“A lot of specialist talent has left Hong Kong in recent years,” Gibson explained. He said the local talent pool is thin, and companies landing in Hong Kong “will find themselves in an extreme war for talent.“

Setting up in Hong Kong requires key roles to be full-time positions. Gibson thinks a “talent squeeze” will continue through to 2024 as Web3 companies “will probably look to move headquarters to a pro-crypto jurisdiction if things go to plan.”

The latest data for the city’s demographics show a negative population growth rate since 2020. Employment stats for Q1 2023 show the number of vacancies increased by nearly 38% compared to the same time last year.

*Hong Kong’s job vacancy rate showing an upward trend since mid-2021. Source: Census and Statistics Department*

Yung added the main challenge is “attracting talent with an interest in these sectors” as many candidates are risk-averse given the “current market sentiment.“

On the other hand, Neil Tan, chair of the FinTech Association of Hong Kong, said he’s “met several people that just recently switched over from TradFi to crypto.”

Tan said many are directly approached by crypto firms, while others use sites such as LinkedIn to find roles.

“TradFi keeps shedding headcount every year or two,” Tan added, “so the stability is not necessarily as attractive as it was before.”

“A lot of people are saying there’s so much positive news inside of the crypto and Web3 space in Hong Kong that they’re willing to take a shot.”

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BitgetX joins HKVAC as it aims for exchange license in Hong Kong

July 5, 2023 Coin Telegraph

Coin Telegraph

The Hong Kong Virtual Asset Consortium was established on May 31 to create indexes and rating services for cryptocurrencies.

According to a July 4 announcement, BitgetX, the Hong Kong subsidiary of cryptocurrency exchange Bitget, has joined the Hong Kong Virtual Asset Consortium (HKVAC), which provides ratings services and indexes to cryptocurrencies.

Launched on May 31 with Huobi as its inaugural member, the HKVAC will produce two indexes. The Cryptocurrency Large Market Cap Index will be based on the 30 highest capitalized cryptocurrencies according to a seven-day median, with other criteria and quarterly rebalancing. There will also be a Cryptocurrency Risk Rating Based Index in the future. Fiona Fan, founding member of HKVAC, commented:

“KVAC is honored to receive support from BitgetX by becoming one of our founding members. The collective goal from both parties to collaborate and promote the long-term development of the virtual asset industry in Hong Kong includes the crafting of regulatory management standards of trading platforms."

Other points for collaboration include improving the quality of transactions and providing better risk management services for investors, as well as “creating a secure trading environment."

Parallel to the news, BitgetX reiterated its commitment to obtain a Virtual Asset Licensing Regime (VASP) with Hong Kong’s Securities and Futures Commission. The new regime for regulatory licenses was enacted in the special administrative region on June 1. Patrick Pan, co-founder and CEO of BitgetX, said: “We are dedicated to fostering a compliant and secure digital asset ecosystem for the global market, with a special focus on promoting the Web3 industry in Hong Kong."

Hong Kong has been actively promoting the adoption of Web3 technologies over the years. Recently, the special administrative region established a Web3 task force headed by Financial Secretary Paul Chan, with Yat Siu, CEO of Animoca Brands, joining as one of its founding members.

Magazine: HK crypto ETFs on fire, Binance warns on Maverick FOMO, Poly hack: Asia Express

‘No other options’: Hong Kong moving forward with crypto licensing, FinTech chair says

May 8, 2023 Coin Telegraph

Asia

Neil Tan, chair of the FinTech Association of Hong Kong, says the opening of the financial industry to digital assets is “just a natural progression.”

Crypto-friendly Hong Kong is still gung-ho about giving its citizens access to crypto trading despite other jurisdictions “taking a step back,” claims the chair of the FinTech Association of Hong Kong (FTAHK).

Speaking to Cointelegraph at the Hong Kong WOW Summit in March, FTAHK chair Neil Tan said while Singapore and the United States are seemingly stepping back from permitting crypto retail trading, “Hong Kong is stepping forward.”

On June 1, a licensing regime for crypto exchanges will come into effect, and Tan said it’s “going to also include retail.” The licensing guidelines are expected to be released sometime in May.

“If there’s access to [crypto] in a legal and regulated way, then I'm sure participants will come. It is a ‘build it and they will come’ because there are no other options. The options are dwindling, actually.”

In February, the region’s securities regulator proposed allowing retail traders access licensed crypto platforms in its licensing regime proposals for Virtual Asset Service Providers (VASPs).

It noted that denying access could push traders to unregulated overseas platforms. Currently, these platforms can only serve accredited professional investors.

*Neil Tan in conversation with Cointelegraph at WOW Summit. Source: WOW*

In January, Securities and Futures Commission (SFC) CEO Julia Leung Fung-yee said that retail traders would be limited to “highly liquid” digital assets but did not give any further details.

Along with providing what many consider to be an attractive legal framework for crypto, Hong Kong is also focusing efforts on attracting talent and infrastructure providers — what Tan called “the back end.”

He added both the Chinese and Hong Kong governments recognize the opportunities in the region and are taking action to try to support inbound talent.

“There's a lot of talent across the border and right now there's a fair amount of unemployment,” Tan said on China. “There's a lot of talent that's coming from Big Tech and so forth that's able to come into Hong Kong.”

Infrastructure to support crypto also needs to be in place for Hong Kong to realize its virtual asset hub ambitions, Tan said. “When the platforms come, they come with that infrastructure. They bring the infrastructure with them as well to deliver the product,” he added.

He added the opening of the financial industry to digital assets was “just a natural progression” as cryptocurrencies “become a little bit more prominent.”

“People are actually adopting [crypto] inside of their portfolios. Whether you're talking about the retail side, high net worth or institutional investors, everyone's looking at their portfolios and trying to get that type of exposure.”

“Now we're back in business. We're opening it up.”

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Gate.io to enter Hong Kong following city’s $6.4M budget allocation to Web3

February 23, 2023 Coin Telegraph

Budget

Gate’s founder called Hong Kong a “hub,” meanwhile, the city’s financial secretary said the region “must keep up” with the “huge potential” of Web3.

Cryptocurrency exchange Gate.io is gearing up to launch a presence in Hong Kong following the local government's planned $6.4 million (50 million Hong Kong dollar) cash injection into Web3 as per the city’s 2023-24 budget.

Gate Group said on Feb. 22 that it will apply for a crypto license in Hong Kong allowing it to launch “Gate HK.” The firm's local company, Hippo Financial Services, gained a license in August 2022 to provide virtual asset custodial services.

It comes as Hong Kong financial secretary, Paul Chan, announced the Web3-related funding and the creation of a crypto task force in a Feb. 22 budget speech.

He added Web3 has “huge potential” and the Special Administrative Region of China must keep pace with its “continuous development.”

“We must keep up with the times and seize this golden opportunity to spearhead innovation development.”

Chan outlined the funds would go toward expediting “the Web3 ecosystem development” by organizing international seminars, promoting business cooperation and arranging “workshops for young people.”

He noted a “large number” of companies are considering setting up shop in the city due to the government’s cryptocurrency laws. Gate Group’s founder, Dr. Han Lin, called Hong Kong “a global strategic market” and a “hub” due to its “industry-leading regulatory regime.”

Very excited about Hong Kong. Having obtained the TCSP License in HK, Gate Group is also preparing for a crypto license and fine tuning Gate HK, a new entity tailored to serve HK’s growing crypto market, stay tuned.
— Lin Han (@han_gate) February 21, 2023

Hong Kong shared its plans on Feb. 20 with a new licensing regime and a proposal to allow retail traders access to licensed crypto platforms.

Due to the influx of business interest, Chan said he “will establish and lead a task force” on virtual asset development made up of members from financial regulators, market participants and “relevant policy bureaux.”

The task force would “provide recommendations on the sustainable and responsible development of the sector” according to Chan.

Hong Kong started its push to gain status as a global crypto hub in October 2022 by launching crypto-friendly policy frameworks to regulate the industry within the city.

Despite being a region of China, the city’s special status allows for its own laws and governance. Hong Kong’s crypto push would seem to be in contrast to China’s crypto ban, but it's reported that officials in Beijing are quietly backing the region's crypto ambitions.

Hong Kong’s crypto ambition gets subtle nod from Beijing: Report

February 21, 2023 Coin Telegraph

Asia

While China has cracked down on cryptocurrencies in the mainland, it’s apparently taking a softer approach to Hong Kong’s crypto hub aspirations.

Hong Kong’s ambition of becoming a cryptocurrency hub is reportedly seeing subtle support from the Chinese government, in what could be seen as a contrast to the mainland’s hard-line anti-crypto stance.

In October last year, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto and allow retail investors to “directly invest into virtual assets” that could possibly be in contrast to China’s widespread crypto ban.

According to people familiar with the matter, Beijing officials have not been brazenly opposed to the idea. According to a Feb. 20 Bloomberg report, it is understood that representatives from the China Liaison Office have been frequenting Hong Kong crypto gatherings seeking to understand what’s going on.

So far, their encounters with Beijing officials on the matter have been friendly, according to those familiar, which is being perceived by local crypto business operators that Beijing — albeit very subtly — may be open to using Hong Kong as a testbed for crypto.

New Bitcoin narrative brewing: Hong Kong is getting into crypto.

What makes it even more interesting is the People's Bank of China is one of the only central banks in the world cutting rates & easing.

Asia is bidding [sources] pic.twitter.com/n5cwE7jI2l
— Luke Martin (@VentureCoinist) February 16, 2023

Hong Kong is a Special Administrative Region of China, allowing it to have its own laws and governance. The former British colony was transferred back to China in 1997 following a guarantee from Beijing there would be no Chinese interference with the region’s economic and political systems for 50 years, known as the “one country, two systems” principle.

National People’s Congress member and digital asset lawyer Nick Chan was quoted as saying that as long as there are no violations of “the bottom line, to not threaten financial stability in China,” then the city is free to undertake its own pursuits.

On Feb. 20, Hong Kong’s Securities and Futures Commission outlined a new crypto license regime that proposed that all centralized exchanges that operate in the region must be licensed with the regulator.

It also proposed allowing retail traders access to licensed cryptocurrency trading platforms, saying public feedback highlighted that denying access to crypto markets may push Hong Kongers to trade on unregulated overseas platforms.

The new regulatory push has spurred many crypto businesses to seek expansion into the city. Most recently the exchange Huobi Global said it would seek a local license and plans to open a new Hong Kong-only exchange with a focus on institutional and high-net-worth individuals.

HK

Talent war is coming

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