BC Technology Group, the parent company of Hong Kong’s publicly listed crypto exchange platform OSL, noted that Hong Kong regulators were swiftly approving cryptocurrency products after the scandal that rocked the digital asset exchange JPEX.
Another fintech provider stated that the participation of banks in the virtual assets sector in Hong Kong will facilitate mass adoption and development.
Crypto Approvals Improve After JPEX, Says OSL Executive
While Hong Kong authorities have increased regulatory scrutiny on the local industry after the JPEX saga, it appears they have also accelerated approvals of crypto-related products, according to Davin Wu, the chief financial officer at BC Technology Group.
The JPEX mess started with a warning from the Hong Kong Securities and Futures Commission (SFC) in September 2023, stating that the crypto exchange made false claims about its licensing status.
While the firm denied the allegations, JPEX eventually shut down operations in Hong Kong, citing a liquidity crisis. The platform was also suspected of rug pulling and faced money laundering accusations, with authorities making multiple arrests and conducting seizures.
Wu, meanwhile, stated that the JPEX saga has caused authorities to increase its monitoring of non-compliant digital asset trading platforms, adding that regulators could prevent such entities from aggressively publicizing their services at places such as MTR Stations, as they did in the past.
As previously reported by CryptoPotato, the SFC, in conjunction with law enforcement officials, set up a task force to monitor and investigate crypto trading platforms for illegal activities.
Banks’ Involvement in Virtual Assets Could Accelerate Adoption
According to Chen Yaowen, chief digital director and financial innovation director at fintech firm Sifang Innovative Hong Kong, banks could play a crucial role in the development and adoption of virtual assets in the city-state.
Yaowen opined that if banks get involved in crypto, it could prove beneficial for the industry, considering the level of trust the public has in such traditional financial institutions. Also, Yaowen predicted that banks could develop tokenized virtual assets and store them in custody wallets in the future.
The executive further said that the China Securities Regulatory Commission’s participation in the review and approval process of virtual assets could serve as a boost for the sector in Hong Kong.
In June, the Hong Kong Monetary Authority (HKMA) urged banks to accept crypto businesses as clients, after the local financial institutions were reported to be hesitant about engaging exchanges.