It is becoming popular for established companies or startup owners to search for new ways of reducing costs, rising profitability, and boosting revenues. Many of them decide to open a cryptocurrency company in Hong Kong. Yet some legal and regulatory challenges can surprise these businessmen. To not find ourselves in an awkward situation, let’s discover what are the aspects of opening a crypto business in Hong Kong and what requirements one needs to fulfill.
As many probably know, although Hong Kong is a part of China, its legal system is different. Besides the rules explicitly listed in Annex III to the Basic Law, Chinese laws are not valid in Hong Kong. It is China that completely banned digital currency use; Hong Kong does not legally limit holding an ICO.
So far, Hong Kong has not created dedicated legislation for governing digital tokens and currencies. It means that companies registered for ICO in Hong Kong are obliged to comply with the existing laws meaning the SFO. As of now, Hong Kong does not recognize virtual currencies and digital tokens as legal tender. However, the situation may change once the local authorities present specialized legislation that would regulate cryptocurrencies. According to some predictions, this might happen in the near future.
Attitudes of the authorities
Hong Kong’s authorities are thoroughly monitoring the development of token-based currencies. The SFC, the main financial regulator of Hong Kong, is working on raising public awareness by publishing numerous statements about virtual currencies and ICOs. In addition, the organization has started a campaign to protect the general public by telling them about what risks can be connected to opening an ICO in Hong Kong.
Besides these initiatives, the SFC keeps a tight connection with licensed entities in order to monitor services and products that could include digital currencies. Even though there are no precise dates for issuing dedicated legislation for cryptocurrency regulation, the local authorities certainly will stick to their current attitudes towards virtual currencies: protecting the interests of local investors and supporting the tendency of Hong Kong becoming a bigger financial center of global importance.
Specialists from COREDO are here to provide you with more advice about cryptocurrency regulation in Hong Kong. Moreover, they are prepared to assist you with launching an ICO and registering your crypto business there, too.