Nowadays, owners of startups & established companies are increasingly looking for ways to boost revenues, improve profitability & reduce costs. So, how can they do that? One of the possible solutions is to register a cryptocurrency company in Hong Kong. However, doing so will make them encounter quite a few legal & regulatory challenges. So, let’s take a closer look at what it takes to open a crypto business in Hong Kong & which requirements entrepreneurs will have to comply with.
Hong Kong: Virtual Currency Regulation
Despite being part of China, Hong Kong retains its own legal system. What this means is that Chinese laws do not apply here; the only exception is the ones that are explicitly listed in Annex III to the Basic Law. While a total ban is imposed on launching token-based digital currencies in China, holding an ICO in Hong Kong is perfectly legal.
As of now, there’s no new legislation in Hong Kong specifically addressing digital tokens or virtual currencies. Hence, those wishing to register a company for ICO in Hong Kong should do so as per the existing laws (e.g. the SFO). Despite not being legal tender in Hong Kong, digital tokens & virtual currencies may well be recognized as such in the near future after Hong Kong authorities enact legislation regulating cryptocurrencies in Hong Kong.
To sum up, Hong Kong authorities are closely monitoring the situation with token-based digital currencies. To increase public awareness, the SFC, Hong Kong’s number one financial regulator, keeps coming up with statements on ICOs & virtual currencies. It has also launched campaigns aimed at familiarizing the general public with risks associated with launching an ICO in Hong Kong.
For the purpose of monitoring services/products that may potentially include digital currencies, the SFC also promotes liaison with licensed entities. It’s yet unclear whether laws regulating digital currencies will be passed in the coming years; however, one thing is absolutely certain: Hong Kong authorities will be continuing to protect the interests of local investors & ensure HK’s continued growth as a global financial center.
Need more information on digital currencies regulation in Hong Kong? Looking for advice on launching a crypto currency exchange in Hong Kong? Why not reach out to IQ Decision UK?