Hong Kong to retain grace period for crypto firms despite recent scandals
Nov. 27, 2023
By Assad Jafri
Hong Kong’s financial regulators have decided to retain the grace period for crypto firms despite the city grappling with major fraud scandals involving crypto exchange platforms JPEX and Hounax in recent weeks, local media reported on Nov. 27.
The grace period allows crypto firms to continue operating in Hong Kong without a license until June 2024 in order to allow ample time to comply with new regulatory standards introduced earlier this year.
Despite the recent scams, the Securities and Futures Commission (SFC) believes that abrupt changes to the grace period could be counterproductive, potentially destabilizing the burgeoning virtual asset sector in Hong Kong.
SFC Director of the Licensing and Fintech Unit Wong Lok-hei said:
“Scams can happen with or without the grace period.”
Meanwhile, SFC CEO Leung Fung-yee echoed the sentiment and said investors must be wary of schemes offering unrealistically high returns.
She added that platforms like Hounax are not regulated entities, and the SFC does not have the power to shut down their operations directly.
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