A Hong Kong Securities and Futures Fee (SFC) official warned that the introduction of the brand new native stablecoin regulatory framework has elevated the chance of fraud.
In keeping with 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 with the current introduction of stablecoin rules. He urged buyers to train warning and keep away from making irrational funding selections pushed by market hype or worth momentum.
Ye’s remarks adopted stablecoin firms working in Hong Kong posting double-digit losses on Aug. 1, simply after the brand new stablecoin regulation got here into drive. 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.
Nonetheless, Ye mentioned that some firms noticed their share costs rise 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 firms.
“These actions seem to comply with company bulletins, information experiences, social media posts or speculations relating to plans to use for stablecoin issuer licence, have interaction in associated actions or discover the feasibility of such initiatives in Hong Kong,” the announcement mentioned.
The SFC additionally mentioned it’s going to intently 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 Commonplace Chartered kind stablecoin enterprise in Hong Kong
Crypto is a excessive precedence for Hong Kong regulators
The warnings come as Hong Kong begins implementing 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 steering on cryptocurrency custody requirements, introducing sweeping safety necessities and a ban on good contracts in chilly pockets implementations, a rule that might battle with present practices at a number of main corporations.
Journal: Hong Kong hoses down stablecoin frenzy, Pokémon on Solana: Asia Specific
