The new Hong Kong Crypto Regulations: Theory and Practice

The Hong Kong Government has made clear its intent to develop Hong Kong into the crypto hub of the Greater China area by providing initial draft regulation earlier in 2023 and latterly final regulations. These regulations outline a clear regulatory framework for the rapidly growing cryptocurrency industry in the region and the promotion of the development of a healthy and sustainable ecosystem for virtual assets.

Known as the Virtual Asset Service Providers (VASP) regime under the new framework crypto service providers should have a clear understanding of which activities trigger a need for a licence while at the same time ensuring that crypto will not become a banned asset class in Hong Kong. More importantly the final regulations show that Hong Kong is serious about becoming the premier crypto hub by allowing Hong Kong...