On October 31, the Hong Kong Financial Secretary (Financial Services and the Treasury Bureau) officially issued the "Policy Declaration on the Development of Virtual Assets in Hong Kong" (hereinafter referred to as the "Declaration"), which clarified the vigorous development of the virtual asset industry and ecosystem in Hong Kong. This has undoubtedly given practitioners great confidence and encouragement in the development of Web3 in Hong Kong.
However, some people think that the "Declaration" is still a new policy implemented by Hong Kong's conservative and cautious. Although it has a strong value of innovation and openness, it has opened a crack for the door closed by Web3 before, but it is still more tentative than open. .
For example, the "Declaration" uses the term "virtual asset" instead of cryptocurrency (Cryptocurrency). Although the definition is not accurately expressed, the meaning of virtual asset should be different from or greater than that of virtual currency. In addition, there are expressions that use "DLT" (distributed ledger technology) instead of "decentralization", which means that it is still technology-oriented rather than a concept.
Earlier, Hong Kong had successfully bred many leading organizations in the encryption industry such as BitMEX, FTX, and Crypto.Com. At that time, BitMEX even leased the forty-fifth floor of the Changjiang Group Center, replacing the original Barclays Capital and announcing that the new world has come. And in the two years from 2018 to 2019, Asia Crypto Week, the top encryption summit in Asia, was held in Hong Kong, which once again emphasized Hong Kong's status in the encryption field.
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Global Fast Track 2022
The Global Fast Track is a global fast track organized by InvestHK, bringing together global innovative fintech companies. These companies already have business clients in their home markets and beyond, and can use their business solutions to connect with regional businesses and investors. The Global Fast Track will help these companies achieve greater viability, visibility and scalability in Hong Kong, Asia and beyond.
BlockBeats has counted 118 outstanding innovative financial technology companies in the Global Fast Track 2022 to get a glimpse of the current Web3 development status in Hong Kong.secondary title
HashKey Group
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Everest Ventures Group
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Token Bay Capital
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Aspen Digital
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Cell Rising Capital
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UVECON
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ParticleX
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Global Digital MOJO
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Battle of Newport
It can be seen that in just two years, Hong Kong seems to have fallen from the altar of the former Asian encryption center, brain drain, project migration, and ecological failure, but these are being injected into Singapore.
Indeed, the number of Web3 companies in Singapore is gradually increasing. Especially after this year's Token2049 was held locally, many Chinese began to have a simple intuition that Web3 startups should go to Singapore. However, from another point of view, it seems that Xingang’s conclusion on the dispute over the Asian encryption center has not yet settled. Although Singapore has become an important Web3 development base in Asia, not all projects are suitable for Singapore.
For example, Singapore’s Monetary Authority MAS has clearly stated that it will take a fairly tough stance on the unfettered retail public, because retail investors should not get involved in cryptocurrencies. In Hong Kong, regulators are considering allowing retail investors to invest directly in crypto assets, and the SFC will launch a public consultation on the appropriateness of retail investors’ ability to buy and sell virtual assets under the new licensing regime.
Therefore, choosing which region to start a business is a very complicated issue, which must be judged comprehensively based on multiple factors such as the commercial nature of the specific project, compliance risks, team background, industry resources, and product characteristics.
So for entrepreneurs with Chinese background, Hong Kong’s more open Web3 market, gradually stable regulatory system, perfect infrastructure, and free flow of capital and information in the future may still help Hong Kong replace Singapore as the first place for Chinese Web3 entrepreneurship. best choice.
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Virtual asset trading and management
In general, Hong Kong currently has three main regulatory agencies for virtual assets (cryptocurrency, etc.) and transactions:Hong Kong Securities and Futures Commission (SFC SFC), Hong Kong Financial Services and the Treasury Bureau (FBS) and Hong Kong Monetary Authority (HKMA).
Among them, with SFCAs the main force of supervision, SFC's regulatory goals include: maintaining and promoting the fairness, efficiency, competitiveness, transparency and order of the securities and futures industry; minimizing criminal acts and misconduct in the securities and futures industry; reducing systemic risks in the securities and futures industry wait.
In Hong Kong, cryptocurrencies are mainly divided intoSecurity Cryptocurrencies, NFTs and Virtual Goods(such as Bitcoin), different regulatory policies will be adopted for different types of cryptocurrencies. The SFC’s interpretation of security-type cryptocurrencies is divided into the following three categories:
- Representation of shareholdings (right to receive dividends and right to participate in the distribution of remaining assets in the event of company liquidation);
- representdebt(The issuer may repay the investment principal and pay interest to token holders on a specified date or upon redemption);
- It can be used to obtain the income of "Collective Investment Scheme".
In addition, the Treasury Bureau and the Monetary Authority assist in supervision from different regulatory perspectives.Treasury BureauAs the second main force of supervision, it is mainly to combat virtual asset money laundering and terrorist financing activities.Monetary AuthorityIt is responsible for Hong Kong's financial policy, banking and currency management, and plays a role similar to a central bank.
The Hong Kong "Declaration" mentioned: in stepping up preparations for new virtual asset service providerslicensing systemAt the same time, we are also happy to contact the global virtual asset industry and invite relevant trading platforms to explore business opportunities in Hong Kong. So what licenses do you need to apply for to legally carry out encrypted financial activities in Hong Kong, and what are the top players in the current market?
SFC stipulates a total of 12 kinds of regulated activities, that is, to engage in these activities, you need to obtain corresponding licenses to accept supervision. Among them, cryptocurrency-relatedTrading platform, fund and money management platformsecondary title OSL、HashKey、NH Asset。
OSL
OSL is a wholly-owned subsidiary of BC Technology Group, a digital asset listed company in Hong Kong. It is also the first company to obtain Type 1 and Type 7 regulatory licenses issued by SFC.
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HashKey
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NH Asset
NH Asset (Xinhuo Asset Management "Hong Kong" Co., Ltd.) is a wholly-owned subsidiary of Xinhuo Technology (formerly "Huobi Technology"). It provides securities consulting and asset management services for professional investors. It has obtained the fourth category and Type 9 regulatory licenses, while for Type 1 and Type 7 licenses regulated by virtual asset trading platforms, Huobi Technology’s subsidiary is in the process of applying.
Currently, NH Asset has released four asset management products for professional investors: Xinhuo Bitcoin Fund, Xinhuo Ethereum Fund, Xinhuo Multi-Strategy Virtual Asset Fund and Private Equity Fund.
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HKD.com
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Tokenization of bonds (securities)
Bond tokenization will help improve the efficiency of bond issuance and settlement, reduce costs, and attract more investors to the market. It is mentioned in the Hong Kong "Declaration" that Hong Kong will try to issue Tokenized green bonds, temporarily issuing a small scale, mainly for institutional investors to subscribe. The goal is to issue within this year, hoping to become the world's first Tokenized green bonds Government green bonds.
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OSL
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Knight Dragon
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NFT
Under the planning of the three regulatory agencies, Hong Kong’s virtual asset licensing regulatory system has gradually become clear. As for the supervision of NFT in Hong Kong, a more detailed division has been carried out. NFT can be divided into two parts: financial asset NFT and collectible NFT.
For financial NFT, its promotional transactions must be strictly regulated by the SFC and can only be carried out after obtaining a license. For collectible NFT, its activities are not within the scope of SFC's supervision. It is worth mentioning that during the "Hong Kong Financial Technology Week 2022", the organizer also issued a limited edition NFT of attendance certificate for the participants. Priority access to other industry events.
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The Heart Project
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ZombieClub
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Artifact Labs
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Red Hare NFT
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Metaverse/GameFi
Metaverse is an immersive virtual space that provides users with rich consumption content and a fair creation platform, where users can carry out various activities such as culture, social interaction, and entertainment. And in the past two years, multiple factors have pushed the metaverse from concept to popularity. It not only brings development opportunities for the combination of games and social networking, but also for retail, e-commerce, and industrial Internet.
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The Sandbox
The Sandbox is a blockchain-based 3D open world Metaverse launched in November 2021 under Animoca Brands.
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STEPN
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Crypto VC
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Animoca Brands
Animoca Brands aims to promote digital property rights through NFT and games, and build an open metaverse. Currently, Animoca Brands has more than 380 portfolios, including Colossal, Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), Yield Guild Games, Harmony, Alien Worlds, Star Atlas, etc.
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Kenetic Capital
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Chiron
Chiron is a venture capital institution in Hong Kong. It once launched a US$50 million encryption fund, mainly investing in DeFi and NFT projects related to Metaverse.
