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Crypto Regulation Coming - Hong Kong Fears Crypto May Endanger Financial System If Not Monitored

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Wed, 01/12/2022 - 12:29
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Yuri Molchan
Hong Kong plans to create a crypto regulation plan by mid-summer and implement it within next few years
Crypto Regulation Coming - Hong Kong Fears Crypto May Endanger Financial System If Not Monitored
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According to Reuters, the Hong Kong Monetary Authority is now collecting comments and suggestions regarding different ways to impose regulatory rules for cryptocurrencies and stablecoins separately.

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 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.

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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.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.