Hong Kong licensed lawyer Gilbert NG shed light on the implications of the United States Securities and Exchange Commission’s (SEC) actions on Hong Kong’s regulatory landscape. NG highlighted several key points that underscore the distinct approach taken by the SEC towards cryptocurrency platforms and its potential influence on Hong Kong’s licensing procedures.
More Strict Crypto Regulations In Hong Kong?
SEC’s actions could potentially impact the license application process for Binance and other platforms in the region. NG observes the contrasting treatment of Binance and USDT (Tether) by the SEC. While the SEC has demanded Binance’s complete departure from the United States, this enforcement action may have repercussions for Binance’s operations in other regions, including Hong Kong, where they may be seeking licensing approvals.
Another significant disparity lies in the definition of securities between the United States and Hong Kong. Certain cryptocurrencies may be deemed security tokens in the United States, whereas they may not fall under the same classification in Hong Kong. Currently, Hong Kong restricts the purchase of security tokens to professional investors only, limiting access for retail investors.
Hong Kong has allowed allow crypto firms and exchanges to apply for licenses starting June 1. The administration has also allowed retail investors to trade top cryptocurrencies such as Bitcoin and Ethereum under safeguards of the Hong Kong Securities and Futures Commission.
Crypto Regulatory Landscape Differences
United States lacks specific laws and regulations governing cryptocurrencies, leaving a degree of uncertainty in terms of regulatory enforcement. While the United States has taken a stricter stance, characterized by lawsuits, scrutiny and unclear regulatory guidelines, countries like Hong Kong, Japan, and UAE have taken steps to establish clear rules and compliance measures for crypto businesses.
CoinGape reported that Hong Kong is set to receive its first spot Bitcoin ETF, while the US SEC remains reluctant to approve one.
Recently, Binance CEO CZ also welcomed the First Digital USD (FDUSD) stablecoin launched by Hong Kong-headquartered custodian and trust company First Digital. While the SEC’s stance towards Binance and its broader enforcement actions may affect licensing applications in Hong Kong, the city’s well-established regulatory framework provides a stable environment for digital asset transactions.
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