Hong Kong’s new crypto rules covered by China state TV in rare move from Beijing

Chi­na Cen­tral Tele­vi­sion (CCTV), the country’s largest nation­al broad­cast­er, shone a light on Hong Kong’s cryp­tocur­ren­cy sec­tor Tues­day when it report­ed on the region’s incom­ing vir­tu­al asset reg­u­la­tions. The move caught the atten­tion of ana­lysts and cryp­to heavy­weights alike. Chang­peng Zhao, CEO of the world’s largest cryp­to exchange Binance, com­ment­ed that the unex­pect­ed focus on the Hong Kong cryp­to space could sig­nal the start of a bull run.

See relat­ed arti­cle: Hong Kong? Sin­ga­pore? Tokyo? Seoul? Dubai? The race is on for the Web3 hub of Asia | Part 1

Fast facts

• Dur­ing the Tues­day evening cov­er­age, CCTV report­ed that the Secu­ri­ties and Futures Com­mis­sion (SFC) of Hong Kong — a spe­cial admin­is­tra­tive region of Chi­na — has final­ized its licens­ing regime for vir­tu­al asset ser­vice providers, which will come into effect on June 1.

• The new rules will allow licensed vir­tu­al asset trad­ing plat­forms to sell cer­tain large mar­ket cap cryp­tocur­ren­cies, such as Bit­coin and Ether, to retail investors in Hong Kong. The exist­ing trad­ing plat­forms serv­ing Hong Kong cus­tomers are required to apply for a license from the SFC with­in 6 months fol­low­ing the June 1 kick-off date. Com­pa­nies that fail to do so will be required to leave the Hong Kong market.

• CCTV inter­viewed Kei­th Choy, the Inter­im Head of Inter­me­di­aries at the Hong Kong SFC, who high­light­ed the impor­tance of cyber­se­cu­ri­ty and cus­tomer asset pro­tec­tion relat­ed to vir­tu­al asset trad­ing plat­forms. “We have seen from pre­vi­ous inci­dents that net­work secu­ri­ty remains a major chal­lenge in the sec­tor,” Choy told CCTV.

• It is not uncom­mon for CCTV — which enjoys an esti­mat­ed total view­er­ship of over 1 bil­lion — to cov­er the cryp­to space. It tracked the col­lapse of FTX in late 2022 and the MiCA (mar­kets in cryp­to assets) reg­u­la­to­ry devel­op­ments in Europe in April. How­ev­er, some busi­ness insid­ers noticed a change of nar­ra­tive in CCTV’s lat­est report on the devel­op­ments in Hong Kong. It was, they said, less crit­i­cal than pre­vi­ous cov­er­age of the cryp­to space.

• CCTV’s cov­er­age of Hong Kong’s cryp­tocur­ren­cy reg­u­la­tion is “a big deal,” tweet­ed Binance CEO Zhao on Wednes­day. “The Chi­nese speak­ing com­mu­ni­ties are buzzing. His­tor­i­cal­ly, cov­er­ages like these led to bull runs.”

Story continues

• “Chi­na is wak­ing up to cryp­to again,” Lark Davis, a Bit­coin investor with over 1.1 mil­lion Twit­ter fol­low­ers, said on Thurs­day. “What is hap­pen­ing in Hong Kong is only pos­si­ble with approval from Beijing.”

• Chi­na banned the trad­ing of cryp­tocur­ren­cies in Sep­tem­ber 2021. How­ev­er, the gov­ern­ment has sig­naled its grow­ing inter­est in explor­ing blockchain-relat­ed tech­nolo­gies. This includes non-fun­gi­ble tokens (NFTs), which cur­rent­ly remain in a reg­u­la­to­ry gray area.

See relat­ed arti­cle: Hong Kong’s e‑HKD pilot puts the world on notice