Hong Kong’s Securities and Futures Commission (SFC) has implemented new regulations for crypto custody, impacting licensed exchanges and potentially affecting the market landscape. The rules mandate the use of hardware security modules and ban smart contracts in cold wallets. This move aims to bolster investor confidence by addressing recent security breaches. },
The SFC emphasized client asset protection as a top priority. Major players like Dr. Eric Yip, Executive Director at SFC, are tasked with implementing these changes across licensed platforms. However, the new regulations come with potential challenges. Increased costs associated with compliance may limit the participation of smaller players in Hong Kong’s crypto space.
Industry leaders, including Chen Wu, CEO of Ex.io, believe these rules will enhance Hong Kong’s global appeal to institutional investors. However, concerns exist about market concentration due to the higher compliance cost burden.
Analysts predict a potential for increased market dominance by established players, as smaller firms may struggle to comply with the stringent regulations.