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As the highly anticipated Hong Kong FinTech Week 2023 (HKFTW) begins today, the city is taking significant strides towards solidifying its position as a global digital asset hub. This flagship event, themed "Fintech Redefined," is set to showcase the latest innovations in fintech and crypto amid Hong Kong's evolving regulatory landscape.
The stage for Hong Kong's emergence as a digital asset hub was set earlier this year when the city awarded its first retail crypto licenses, a move signaling its intent to embrace the digital finance revolution while laying the foundation for a robust regulatory framework that balances innovation and security. This move positions Hong Kong as a major player in the crypto space, where regulations are key to ensuring investor protection.
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While Hong Kong aims to capitalize on the growing interest in Web3 and digital assets, it's essential to note the challenges that come with such rapid adoption. Recent events, including the recent JPEX fraud scandal, have raised concerns about the need for stricter oversight in the crypto sector.
Hong Kong's journey toward becoming a digital asset hub will likely involve a delicate balance between fostering innovation and maintaining regulatory integrity. Cryptocurrency related crimes are on the rise in the city, which saw 2,336 cryptocurrency-related complaints last year – a 67% rise from a year ago, SCMP reported. Earlier this month, Hong Kong’s Securities and Futures Commission updated its regulatory framework with additional investor protection measures.
Adding to the Fintech Week excitement is the launch of Zodia in Hong Kong. Zodia, a digital asset custodian owned by Standard Chartered, has the potential to revolutionize institutional crypto investment. Owned by Standard Chartered, Zodia aims to provide institutional investors with a secure gateway to the crypto market. This move underscores Hong Kong's status as a global financial powerhouse with a keen interest in crypto's future. Zodia Custody's global footprint has been steadily expanding, with recent ventures into Japan, Australia, and Singapore on the heels of a successful $36 million Series A funding round.
Adding depth to the Fintech Week narrative is the rise of Web3 and mass adoption in the region. The tech-savvy population in Hong Kong and Asia is showing a growing appetite for decentralized technologies. As we enter the era of Web3, where blockchain and cryptocurrencies play central roles, Hong Kong's pursuit of innovation is poised to make a significant impact. The stakes have never been higher.
View the agenda, speakers and secure your ticket here. Blockhead is a media partner for Hong Kong Fintech Week 2023.
Elsewhere,
- Taiwan's Crypto Regulation Steps Begin: Taiwan has made its first steps towards regulating digital assets by introducing the Virtual Asset Management Ordinance Draft in the Legislative Yuan. The bill is designed to define virtual assets and establish standards for consumer protection and a framework for asset operators. Derivatives linked to virtual assets are recognised to have unique characteristics under the bill, which could pave the way for future crypto-derivative regulation. Unlike regional neighbours, the bill does not restrict digital asset trading to just professional investors. Exchanges will be required to provide reports from accountants and allow regular inspections.
- Kraken Plays Ball: Kraken will share tens of thousands of users' data with the Internal Revenue Service (IRS) as requested by a court order in June. Information shared will be taken from transactions above $20,000 by customers between 2016 and 2020 and includes names, birthdays, Tax IDs, addresses and contact information for US customers. Kraken will share the information in early November. Its decision comes after a two-year legal battle between the exchange and the government. Kraken prevented the IRS From obtaining more information from clients. The exchange has also appointed a new UK Managing Director - Bivu Das.
- Gemini Sues Genesis: Gemini has filed a lawsuit against Genesis, seeking control of over 60 million shares of the Grayscale Bitcoin Trust (GBTC). The shares were pledged as collateral for the Gemini Earn product and to satisfy the claims of Earn customers who had their funds locked when Genesis froze withdrawals. "Genesis has repeatedly taken actions to harm Earn users and to hinder and delay Earn users’ recovery of their digital assets," the lawsuit alleged.
- Australia Bust Chinese Laundering Ring: Just one month ago, Singapore police uncovered a $2 billion money laundering scheme. Now, Australia Federal Police have busted a Chinese crime syndicate accused of laundering nearly A$229 million (US$144 million) over the last three years. Four Chinese nationals and three Australians, including the boss, have been arrested for being allegedly linked to the Long River money laundering ring. Operating under the guise of Changiang Currency Exchange, the group used a money transfer chain with 12 shopfronts in Australia. Most of the money transferred was reportedly legitimate but the firm facilitated transfers of unlawfully obtained funds such as proceeds from cyber scams and illicit goods trafficking.
