A Hong Kong Securities and Futures Fee (SFC) official has warned that the introduction of the brand new native stablecoin regulatory framework has elevated the danger of fraud.
Based on an Aug. 18 report by Chinese language monetary information outlet Zhitongcaijing, Ye Zhiheng, govt director of the intermediaries division on the SFC, mentioned that fraud dangers have elevated following the current introduction of stablecoin regulation. He urged buyers to train warning and keep away from making irrational funding choices pushed by market hype or value momentum.
Ye’s remarks comply with stablecoin corporations working in Hong Kong posting double-digit losses on Aug. 1, simply after the brand new stablecoin regulation got here into pressure. Analysts on the time described the sell-off as a wholesome correction, as the necessities for stablecoin issuers proved to be extra stringent than anticipated.
Ye famous, nevertheless, that some companies noticed their share costs rise sharply just by disclosing plans to use for a stablecoin license.
Associated: China cracks down on stablecoin promotions, analysis and seminars
Hong Kong authorities warn towards stablecoin hypothesis
Final Thursday, the SFC and the Hong Kong Financial Authority (HKMA) collectively issued a press release on current market actions associated to stablecoins. The regulators pointed to “current abrupt market actions linked to the stablecoin idea” of corporations.
“These actions seem to comply with company bulletins, information stories, social media posts or speculations relating to plans to use for stablecoin issuer licence, interact in associated actions or discover the feasibility of such initiatives in Hong Kong,” the announcement said.
The SFC additionally mentioned it should carefully monitor buying and selling actions in Hong Kong. The regulator plans to “take stringent actions towards any manipulative or misleading practices that might compromise the integrity of the market.”
Associated: Animoca and Normal Chartered kind stablecoin enterprise in Hong Kong
Crypto is a excessive precedence for Hong Kong regulators
The warnings come as Hong Kong begins imposing its Stablecoin Ordinance, which took impact Aug. 1 and launched a six-month transition interval for compliance.
The Stablecoin Ordinance successfully criminalizes the providing or promotion of unlicensed fiat-referenced stablecoins to retail buyers. These measures additionally adopted native authorities finalizing their regulatory framework for stablecoin issuers and launching a devoted public license registry.
Final week, the SFC additionally issued instantly efficient steerage on cryptocurrency custody requirements, introducing sweeping safety necessities and a ban on sensible contracts in chilly pockets implementations — a rule that might battle with present practices at a number of main companies.
Journal: Hong Kong hoses down stablecoin frenzy, Pokémon on Solana: Asia Specific
