Restrictive OTC regulations for institutions during Hong Kong ETF launch
Bitcoin
-hongkong.jpg” />
Hong Kong has emerged as a key player in the race to become Asia’s leading crypto hub, launching the region’s first spot crypto ETFs on April 30 with over $130 million in inflows on the first day via bitcoin and ethereum. To gain a deeper insight into the implications of this milestone and Hong Kong’s evolving virtual asset landscape, CryptoSlate He spoke with HB Lim, General Manager of BitGo APAC.
Lim brings a wealth of regulatory and crypto industry experience to the conversation. Before joining BitGo, a leading institutional crypto custody provider, he served as a director at Abu Dhabi Global Market, where he helped create progressive crypto regulatory frameworks. Lim previously held positions regulating financial institutions at the Monetary Authority of Singapore.
In this exclusive interview, Lim shares his perspective on how Hong Kong’s spot ETF offerings could impact market forces and investor participation in the region. It also evaluates Hong Kong’s overall virtual asset regulatory framework and how it compares to other rivals aiming to become Asia’s crypto hub, such as Singapore and the UAE.
Lim offers intimate insight into areas where Hong Kong’s crypto regulations can be improved, such as creating licensing options for independent custodians and calibrating rules for institutional OTC trading desks. He also discusses his perspective on digital assets in Hong Kong and APAC, and BitGo’s plans to support the region’s growing ecosystem in the coming years.
Hong Kong’s spot ETFs will launch on April 30, and how do you think this will affect the region’s crypto market dynamics and investor participation?
Currently, the primary markets for spot crypto ETFs are in North America and Europe. This means that such ETFs are not available for trading during most trading hours in Asia; This is against the 24/7 market of cryptocurrency. Therefore, owning spot crypto ETFs in Hong Kong provides investors with more complete trading hours to access crypto.
Additionally, some investors may choose not to trade spot crypto ETFs listed in North America or Europe for reasons such as less favorable taxes or restrictions from regulators in their home country. Hong Kong spot crypto ETFs offer another option for investors who think Hong Kong offers more advantages in terms of taxes and regulatory access.
The introduction of spot crypto ETFs in HK will deepen liquidity in HK crypto markets and lead to a growing supporting ecosystem of crypto exchanges, crypto custodians, banks, brokers and professional services.
Given your regulatory background, how do you evaluate Hong Kong’s overall virtual asset regulatory framework? Does it strike the right balance between innovation and investor protection?
HK has developed an extremely comprehensive and robust virtual asset regulatory framework and should be praised for this. However, there are areas for improvement, such as the need to create a regulatory framework to provide an additional custody option for independent virtual asset custodians and the need to calibrate the HK’s proposed regulatory framework for OTC trading of virtual assets.
Currently, virtual asset exchanges in HK are only allowed to use virtual asset custody services provided by a subsidiary. Banks that wish to offer virtual asset custody services but outsource this service are only allowed to use virtual asset custody services provided by a HK-licensed virtual asset exchange or another HK-licensed bank. Use of banks and virtual asset exchanges in HK is not currently permitted. Specialist third-party independent virtual asset custodians limiting the options in the market. There is also currently no licensing regime for independent virtual asset custodians in HK administered by the HK SFC or HKMA.
A successful web3 industry requires the support of expert, independent virtual asset custodians. Virtual asset wallets are the gateway to web3, and proper storage and protection of virtual assets is crucial to building trust in the industry. Therefore, HK could also benefit from developing a regulatory framework for licensing independent virtual asset custodians, providing a complementary option to virtual asset custody in HK.
On the OTC trading front, HK recently issued an advisory proposing to regulate OTC trading of virtual assets. The proposals appear to be quite restrictive in that they suggest OTC trading desks should only be allowed to offer crypto-fiat trading pairs and limit the crypto that can be traded to only those approved for trading on licensed exchanges in HK. The offers appear to be targeted more at brick-and-mortar stores in HK that offer retail customers the ability to buy and sell crypto assets, and the offers appear to be less suitable for institutional OTC trading desks that do not deal with retail customers and follow robust compliance. Programs that include Know Your Customer checks. OTC trading offerings may benefit from having a separate regime for institutional OTC trading desks, recognizing that such desks carry lower risks.
With Singapore and the UAE also aiming to become Asia’s leading crypto hub, how do you think Hong Kong’s spot ETF offerings will strengthen its competitive position?
HK offering spot crypto ETFs will likely attract more web3 firms, investors and talents to put down roots in HK, leading to a virtuous cycle of growth in the web3 ecosystem there.
What excites you most about the future of digital assets in Hong Kong and the APAC region, and how does BitGo plan to contribute to this evolution in the coming years?
Virtual asset wallets are the gateway and foundation of web3, and virtual asset wallet and custody providers like BitGo are major players in any web3 ecosystem. BitGo has been active in the APAC region for many years and we remain optimistic about the adoption and growth of web3 in Hong Kong and the rest of APAC. As a firm that puts security and compliance first, we look forward to continuing to contribute to the web3 ecosystem in HK and the rest of APAC through our thought leadership and supporting firms with our safe and secure virtual asset wallets and world-class brokerage services.
Contact Hobeng Lim
#Restrictive #OTC #regulations #institutions #Hong #Kong #ETF #launch
Bitcoin
-hongkong.jpg” />
Hong Kong has emerged as a key player in the race to become Asia’s leading crypto hub, launching the region’s first spot crypto ETFs on April 30 with over $130 million in inflows on the first day via bitcoin and ethereum. To gain a deeper insight into the implications of this milestone and Hong Kong’s evolving virtual asset landscape, CryptoSlate He spoke with HB Lim, General Manager of BitGo APAC.
Lim brings a wealth of regulatory and crypto industry experience to the conversation. Before joining BitGo, a leading institutional crypto custody provider, he served as a director at Abu Dhabi Global Market, where he helped create progressive crypto regulatory frameworks. Lim previously held positions regulating financial institutions at the Monetary Authority of Singapore.
In this exclusive interview, Lim shares his perspective on how Hong Kong’s spot ETF offerings could impact market forces and investor participation in the region. It also evaluates Hong Kong’s overall virtual asset regulatory framework and how it compares to other rivals aiming to become Asia’s crypto hub, such as Singapore and the UAE.
Lim offers intimate insight into areas where Hong Kong’s crypto regulations can be improved, such as creating licensing options for independent custodians and calibrating rules for institutional OTC trading desks. He also discusses his perspective on digital assets in Hong Kong and APAC, and BitGo’s plans to support the region’s growing ecosystem in the coming years.
Hong Kong’s spot ETFs will launch on April 30, and how do you think this will affect the region’s crypto market dynamics and investor participation?
Currently, the primary markets for spot crypto ETFs are in North America and Europe. This means that such ETFs are not available for trading during most trading hours in Asia; This is against the 24/7 market of cryptocurrency. Therefore, owning spot crypto ETFs in Hong Kong provides investors with more complete trading hours to access crypto.
Additionally, some investors may choose not to trade spot crypto ETFs listed in North America or Europe for reasons such as less favorable taxes or restrictions from regulators in their home country. Hong Kong spot crypto ETFs offer another option for investors who think Hong Kong offers more advantages in terms of taxes and regulatory access.
The introduction of spot crypto ETFs in HK will deepen liquidity in HK crypto markets and lead to a growing supporting ecosystem of crypto exchanges, crypto custodians, banks, brokers and professional services.
Given your regulatory background, how do you evaluate Hong Kong’s overall virtual asset regulatory framework? Does it strike the right balance between innovation and investor protection?
HK has developed an extremely comprehensive and robust virtual asset regulatory framework and should be praised for this. However, there are areas for improvement, such as the need to create a regulatory framework to provide an additional custody option for independent virtual asset custodians and the need to calibrate the HK’s proposed regulatory framework for OTC trading of virtual assets.
Currently, virtual asset exchanges in HK are only allowed to use virtual asset custody services provided by a subsidiary. Banks that wish to offer virtual asset custody services but outsource this service are only allowed to use virtual asset custody services provided by a HK-licensed virtual asset exchange or another HK-licensed bank. Use of banks and virtual asset exchanges in HK is not currently permitted. Specialist third-party independent virtual asset custodians limiting the options in the market. There is also currently no licensing regime for independent virtual asset custodians in HK administered by the HK SFC or HKMA.
A successful web3 industry requires the support of expert, independent virtual asset custodians. Virtual asset wallets are the gateway to web3, and proper storage and protection of virtual assets is crucial to building trust in the industry. Therefore, HK could also benefit from developing a regulatory framework for licensing independent virtual asset custodians, providing a complementary option to virtual asset custody in HK.
On the OTC trading front, HK recently issued an advisory proposing to regulate OTC trading of virtual assets. The proposals appear to be quite restrictive in that they suggest OTC trading desks should only be allowed to offer crypto-fiat trading pairs and limit the crypto that can be traded to only those approved for trading on licensed exchanges in HK. The offers appear to be targeted more at brick-and-mortar stores in HK that offer retail customers the ability to buy and sell crypto assets, and the offers appear to be less suitable for institutional OTC trading desks that do not deal with retail customers and follow robust compliance. Programs that include Know Your Customer checks. OTC trading offerings may benefit from having a separate regime for institutional OTC trading desks, recognizing that such desks carry lower risks.
With Singapore and the UAE also aiming to become Asia’s leading crypto hub, how do you think Hong Kong’s spot ETF offerings will strengthen its competitive position?
HK offering spot crypto ETFs will likely attract more web3 firms, investors and talents to put down roots in HK, leading to a virtuous cycle of growth in the web3 ecosystem there.
What excites you most about the future of digital assets in Hong Kong and the APAC region, and how does BitGo plan to contribute to this evolution in the coming years?
Virtual asset wallets are the gateway and foundation of web3, and virtual asset wallet and custody providers like BitGo are major players in any web3 ecosystem. BitGo has been active in the APAC region for many years and we remain optimistic about the adoption and growth of web3 in Hong Kong and the rest of APAC. As a firm that puts security and compliance first, we look forward to continuing to contribute to the web3 ecosystem in HK and the rest of APAC through our thought leadership and supporting firms with our safe and secure virtual asset wallets and world-class brokerage services.
Contact Hobeng Lim
#Restrictive #OTC #regulations #institutions #Hong #Kong #ETF #launch