The Hong Kong Financial Authority (HKMA) is encouraging banking giants to simply accept crypto exchanges as purchasers, the Monetary Occasions reported on June 15.
Whereas no restrictions maintain Hong Kong banks again from accepting crypto purchasers, banks are cautious of drawing regulatory scrutiny in case their purchasers are discovered ed in any felony actions, the report mentioned. The implosion of FTX and the alleged mishandling of its consumer funds have solely made banks extra cautious.
Beneath the circumstances, HKMA is making an attempt to inspire banks to tackle crypto purchasers to additional its purpose of turning Hong Kong into a world crypto hub.
The regulator additionally instructed banks in a letter on April 27 that the due diligence procedures of the banks mustn’t impose an “undue burden” on crypto companies looking for to determine a base in Hong Kong.
Niel Tan, chair of the FinTech Affiliation of Hong Kong, mentioned:
“The whole lot has been completed on the federal government’s aspect to encourage these banks to facilitate the opening of banking providers to the sector.”
In step with its purpose of offering clear rules, Hong Kong launched a brand new licensing regime for crypto exchanges providing providers to retail buyers on June 1. The HKMA can also be seeking to introduce complete guidelines for stablecoins over the subsequent 18 months.
Moreover, exchanges within the U.S. are looking for extra crypto-friendly locations as they face elevated regulatory scrutiny, with Hong Kong vying for the enterprise. Simply final week, after the U.S. Securities and Change Fee (SEC) sued Binance and Coinbase, pro-Beijing lawmaker Johnny Ng invited Coinbase and different exchanges to arrange places of work in Hong Kong.
Banks stay cautious of crypto companies.
Throughout a gathering final month, the HKMA raised inquiries with HSBC, Customary Chartered, and the Financial institution of China relating to their reluctance to onboard crypto companies as purchasers; three undisclosed sources instructed FT.
An unnamed supply aware of the dialogue instructed FT that HKMA “inspired the banks to not be afraid.” However the supply added:
“There may be resistance from a traditional banking mindset . . . we’re seeing some resistance from senior executives at conventional banks.”
As per the report, banks are attempting to stay open to encouragement from the regulator to assist crypto exchanges. On the similar time, nonetheless, they’re maintaining a tally of the developments of the regulatory proceedings within the U.S.
The banks wish to assist the event of the crypto business in keeping with Hong Kong authorities coverage. However they’re involved about getting in sizzling water with the regulators in case of anti-money laundering or know-your-customer points with the crypto exchanges.
