The authority believes that crypto may impose high risks to the local financial system if this industry is left without any regulation. So now, the goal is to prepare a regulatory plan to implement it by 2024.
The regulation plan will, aside from other benefits, protect investors from scammers in the crypto space. One of the factors that has contributed to this is a recent case, in which users were unable to withdraw their funds from local exchange Coinsuper. The platform was spearheaded by the president of UBS China, Karen Chen, and had Pantera Capital among its investors.
Hong Kong announced that it expects to formulate a new regulatory plan for cryptocurrencies by July this year, and implement it by 2023/24. https://t.co/1aRFacmPN1— Wu Blockchain (@WuBlockchain) January 12, 2022
Hong Kong prepares crypto regulation plan
Following the example of their colleagues around the world, Hong Kong financial authorities are now concerned with the rapid growth of crypto investments and the utilization of crypto for fast and cheap money transfers between locations that can be on opposite ends of the world.
The Hong Kong Monetary Authority (HKMA) fears that crypto can damage the financial system if there is a lack of or no regulation of this space at all, according to the paper published by the HKMA.
By March 31, the regulator expects to collect feedback from the public and stakeholders. The financial authority has stressed the growing use of stablecoins for money transfers and payments, as well as protecting crypto investors from frequent crypto scams, as well as ways for financial institutions to interact with digital assets.
Bloomberg states that the regulation plan should be ready by July of this year.
Pantera Capital-backed HK exchange freezes withdrawals
As covered by U.Today earlier, on Jan. 7, HK-based exchange Coinsuper, backed by a major VC fund focused on the blockchain space, Pantera Capital, made it impossible for investors to withdraw their funds—both fiat and crypto. They have been unable to move their funds off the platform since November.
At least seven clients who suffered from this have turned to the police, but the latter have not provided any clear response as they are just beginning to investigate the case.