Hong Kong virtual asset OTC trading custody services to be primarily regulated by the Securities and Futures Commission rather than the Customs

Planet Daily News: Last year, when the Hong Kong Financial Treasury Bureau consulted the public on virtual asset over-the-counter (OTC) trading, they proposed that the Customs Commissioner would issue licenses and regulate virtual asset OTC services. Hong Kong Financial Secretary Christopher Hui explained that after initially proposing OTC regulation by Customs, some legislative council members raised objections, including concerns about potential regulatory arbitrage. They subsequently discovered that market operating models were more complex than initially imagined, with some OTC institutions not only providing OTC services but also offering custody services. Therefore, they hope to centralize the regulation of related transactions, now designating the Hong Kong Securities and Futures Commission as the primary regulator. If the services involve banking aspects, the Hong Kong Monetary Authority will serve as the frontline regulator. Christopher Hui further added that regardless of whether virtual asset service providers will ultimately be licensed, they will be given sufficient expectations and ensure adequate regulatory and other resources to handle license applications.