Hong Kong is actively exploring virtual assets, walking the forefront, and striving to build an international virtual asset center.
After nearly two years of winter, many crypto assets have recorded significant gains this year. In addition, PayPal launched a stable currency backed by the US dollar on August 8, becoming the first large financial technology company to accept digital currency payment transfers. The signs of recovery in the virtual asset field are becoming more and more obvious.
As an international financial center, Hong Kong has continued to make efforts in this field recently. Marked by the “Policy Declaration on the Development of Virtual Assets in Hong Kong” issued by the SAR government at the end of October 2022, the world’s first batch of tokenized green bonds worth 0.8 billion Hong Kong dollars will be successfully sold from February 2023. By April 2023, the Hong Kong Web3.0 Association will be established, including a number of financial technology companies, industry leaders and members of the Legislative Council in the Mainland and Hong Kong to “offer suggestions”; to the theme of “New Definition of Financial Technology” in Asia’s annual financial technology event-“Hong Kong Financial Technology Week” scenery ended-Hong Kong in virtual assets actively explore, walk the forefront, and strive to build an international virtual asset center ambition. In this context, as a Hong Kong-listed company that continues to cultivate block chain, big data and pays close attention to regulatory compliance technology, Ou Ke Yun Chain (1499.HK) has “made frequent moves” in launching regulatory compliance tools. The company’s grand vision of promoting the development of Hong Kong’s Web3.0 industry towards safety and compliance with more perfect technical services has also attracted the attention of many industry partners and even has the potential to “break the circle.
In his speech at the main forum of “Hong Kong Financial Technology Week” held on November 2, Hong Kong Chief Executive Li Jiachao said that under the advantages of “one country, two systems”, Hong Kong can bring unique opportunities to financial technology enterprises. The government will strive to promote the influence of financial technology in Hong Kong and other regions. Leung Fung-yee, chief executive of the Hong Kong Securities and Futures Commission, said that the authorities will issue two guidelines, including the risk management of asset tokenization, regulatory expectations, and additional protection requirements for public offering funds, with particular attention to due diligence, custody, transaction and resale record arrangements. The Secretary for Financial Services and the Treasury, Mr Hui Zhengyu, took the opportunity to announce that he would promote the application and innovation of virtual assets and Web3.0 in the real economy, and further improve the regulatory framework. For example, the Treasury Bureau and the HKMA will jointly issue a consultation document on the regulatory system for stable currency issuers, and the HKMA will continue to consult the industry on the relevant guidelines for banks to provide virtual asset custody services. Zhang Qingsong, deputy governor of the People’s Bank of China, said at the forum that the central bank will sign a tripartite cooperation memorandum with the Hong Kong Monetary Authority and the Macau Monetary Authority in the near future to further deepen the financial technology innovation supervision cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area. All this indicates that although the virtual asset industry is coming out of the trough and the Hong Kong SAR government continues to uphold the development logic of “steady innovation” in the face of Web3.0 and financial technology enterprises, the ultra-high risk that will easily evaporate investors’ assets instantly has shifted the focus of attention of the cryptocurrency industry to “compliance and security.
From a global perspective, this trend is already clear: as virtual assets become increasingly connected to traditional finance, the Bank for International Settlements calls on governments to regulate virtual assets in accordance with the principle of “same business, same risk, same norms. According to the data, last year alone, phishing, identity fraud, such as blackmail, smart contract vulnerabilities, NFT airdrops and other scams caused losses of up to $100 billion to virtual asset investors, 17 times the total of the past three years. In May of this year, the EU Finance Ministers’ Meeting passed the world’s first set of rules to comprehensively regulate cryptocurrency assets-the “Crypto Asset Market Regulations”, which aims to reduce illegal activities including money laundering and protect investors and consumers. Leading the world in terms of asset supervision.
Looking back to Hong Kong, the loss caused by cryptocurrency fraud in Hong Kong last year also reached 1.7 billion Hong Kong dollars (US $0.2166 billion), an increase of 106 over the previous year; the number of related fraud cases was 2336, an increase of 67% over the previous year. In September this year, after the suspected fraud case of JPEX, an unlicensed cryptocurrency exchange that caused a sensation at home and abroad, was exposed, the Hong Kong police received more than 2300 reports involving more than HK $1.4 billion. In view of the fact that the incident occurred after the implementation of the virtual asset trading platform application (VASP) system, the Hong Kong Securities and Futures Commission (SFC) immediately announced that it would take a series of lists, including the release of the “list of licensed virtual asset trading platforms”. Measures to strengthen supervision and ensure information transparency. It can be expected that with the rapid development of Web3.0, the demand for regulatory compliance tools based on big data is bound to increase day by day.
As the saying goes, “if a worker wants to do a good job, he must first sharper his tools”. Only efficient compliance technology tools can make the work of the regulatory authorities “get twice the result with half the effort”. Recently, FT Chinese Network and the world’s leading block chain data and technology service provider Ou Keyun Chain (14.99.HK) hosted the “LinkWeb3.0 Security Salon” in Hong Kong, inviting Ms. Bi Lianghuan, chief researcher of Ou Keyun Chain, to discuss with several senior experts in the field of financial science and technology how to improve the security and compliance of virtual asset transactions so as to protect the interests of investors.
Ms. Bi Lianghuan introduced at the event that with its technical strength and professional accumulation, the on-chain anti-money laundering (AML) solution and the “on-chain eye” one-stop investigation and traceability platform can be described as “born at the right time”. Taking the anti-money laundering compliance technical scheme on the Onchain AML chain for the whole industry as an example, the two key capabilities of KYA(Know Your Address) and KYT(Know Your Transactions) can effectively identify high-risk behaviors and suspicious transactions in virtual asset transactions, while automatically scanning key information such as blacklist addresses and high-risk identities, effectively helping regulatory and law enforcement agencies to investigate the whole story of the case and recover concealed assets with the help of relationship links and case analysis, in turn, it will effectively combat digital asset-related crimes and help digital asset compliance and risk prevention and control.
In the financial regulatory environment where the Hong Kong market is in line with international standards, coupled with the addition of compliance tools on the multi-dimensional chain by leading companies represented by the Eurocloud chain, the compliance of Web3.0 and fintech will be greatly improved, and the risk problems that plague the development of the industry will also be resolved. In the future, under the premise of giving full play to the advantages of financial technology and compliance technology, encouraging innovation and security in parallel, and establishing a more stable and safe business environment, the development prospects of the virtual asset industry in Hong Kong are bound to be broader.
Note: There are significant legal risks associated with virtual currency-related activities. Please, in accordance with regulatory norms, pay attention to screening and away from illegal financial activities, beware of personal property and rights damage.
(Source: FT Chinese website)
