Cryptocurrencies

    Hong Kong SFC proposes new staff to enhance crypto regulations

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    Hong Kong's Securities and Futures Commission (SFC) has proposed an expansion of its workforce dedicated to cryptocurrency regulation in its upcoming fiscal budget.

    The SFC plans to add eight new positions specifically aimed at enhancing regulatory frameworks, market surveillance, and enforcement investigations related to virtual assets.

    This proposal is part of a broader budget plan for the fiscal year 2025-2026, which includes a total of 15 new headcounts.

    The SFC presented this budget at a Legislative Council meeting, estimating its recurrent expenditure for the next fiscal year at HK$2.59 billion ($332.4 million), reflecting a 7.2% increase from the previous year.

    The increase in budget is largely attributed to rising staff costs, including an average salary hike of approximately 2.1%.

    Notably, the SFC has maintained a freeze on headcount in three out of the last five financial years, indicating a shift in strategy as it seeks to bolster its regulatory capabilities.

    Despite deploying experienced staff for crypto-related tasks, the SFC reported that it fell short of its target for on-site inspections of licensed corporations in 2023, conducting only about 200 inspections instead of the planned 300.

    Hong Kong has actively pursued becoming a crypto hub, having launched a licensing regime for virtual asset trading platforms (VATPs) in June 2023.

    The government is also advancing legislation related to stablecoins, further solidifying its commitment to the crypto sector.

    In December 2024, the SFC expedited the VATP licensing process and recently approved licenses for two additional platforms, bringing the total number of licensed exchanges to nine.

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