Xu Zhengyu: Submit a bill to the Legislative Council as soon as possible on the over-the-counter virtual asset trading licensing system

According to Jinse Finance, the Secretary for Financial Services and the Treasury of Hong Kong, Christopher Hui, responded in writing to a legislator's question, stating that the Securities and Futures Commission strengthened information disclosure in September last year and released a lot of information about virtual asset trading platforms, including a "list of suspicious virtual asset trading platforms" to provide clear, transparent and timely information to the public. As of February 14th this year, 14 trading platforms were listed on the list.

In the past three years (2021 to 2023), there were 1,397, 2,336 and 3,415 cases of virtual asset-related crimes, involving amounts of HKD 824 million, HKD 1.704 billion and HKD 4.398 billion, respectively. As for the number of arrests and prosecutions, the police will only consolidate relevant figures for specific cases. For example, in the JPEX case, as of yesterday (20th), the police had arrested 70 people, but no one had been charged.

In addition, as of February 2nd this year, the Securities and Futures Commission and the Police have exchanged intelligence on more than 100 virtual asset trading platforms or related activities. Based on a basket of factors, the Securities and Futures Commission and the Police will decide whether to establish a special investigation into individual trading platforms and activities, including whether they are related to Hong Kong, whether they involve violations of relevant laws, and the number of people and amounts involved.

To further improve the regulatory framework, the Treasury Department launched a public consultation on the legislative proposal for the licensing regime for virtual asset trading service providers on February 8th this year, with the consultation period ending on April 12th. In addition, the Treasury Department and the Hong Kong Monetary Authority jointly launched a public consultation on the regulation of stablecoin issuers in December last year, with the consultation period ending on February 29th this year. Depending on the results of the consultation and the progress of preparatory work, the government will submit a draft regulation to the Legislative Council as soon as possible regarding the licensing regime mentioned above.