Hong Kong's virtual asset OTC transaction custody services are planned to be mainly regulated by the SFC rather than the Customs
Internet reports that last year, when the Hong Kong Treasury Bureau consulted the public on over-the-counter transactions (OTC) of virtual assets, it proposed that the Commissioner of Customs and Excise be licensed and that the Customs regulate OTC services for virtual assets. Hong Kong Treasury Secretary Hui Ching-yu explained that after proposing to hand over OTC to customs regulation, members of the Legislative Council raised different opinions, including concerns about regulatory arbitrage. Later, it was discovered that the market operating model was more complex than when originally imagined. Some OTC institutions not only operate OTC services but also provide custody services. Therefore, they hope to centrally supervise relevant transactions. Now the Hong Kong Securities and Futures Commission is designated as the main regulator. If (services) involve banks at that time, the HKMA will serve as the front-line regulator. Xu Zhengyu also added that regardless of whether virtual asset service providers will ultimately be deemed to have been licensed, full expectations will be given to ensure that there are sufficient regulatory and other resources to process license applications.
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