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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.

Hong Kong harbor skyline view into Kowloon
Hong Kong (Ruslan Bardash/Unsplash)

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.

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"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.

Read more: Hong Kong Chief Says Regulators May Get Powers to Crack Down on Unlicensed Crypto Exchanges: Report


Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. Previously, Shumba interned at Business Insider and Bloomberg. Camomile has featured in Harpers Bazaar, Red, the BBC, Black Ballad, Journalism.co.uk, Cryptopolitan.com and South West Londoner.

Shumba studied politics, philosophy and economics as a combined degree at the University of East Anglia before doing a postgraduate degree in multimedia journalism. While she did her undergraduate degree she had an award-winning radio show on making a difference. She does not currently hold value in any digital currencies or projects.

Camomile Shumba