FT Ignites Asia quotes Gaven Cheong on the impact of the proposed virtual asset dealing licence on asset managers in Hong Kong
min readGaven Cheong, Partner in the Financial Services Regulation & Funds team in Hong Kong, contributes to an article in FT Ignites Asia that discusses the potential impact of Hong Kong's proposed virtual asset dealing licence on crypto fund managers.
As Hong Kong aims to become a hub for digital assets, the new licensing requirements could deter its ambitions by affecting offshore managers with trading teams based in Hong Kong. The Securities and Futures Commission recently closed a consultation on these proposals, which require asset managers dealing with or advising on virtual assets to be licensed.
Gaven highlights that offshore managers would need a licence to operate in Hong Kong, potentially prompting them to relocate staff to other jurisdictions like Vietnam, Thailand, or Indonesia. This is due to the perceived hassle of obtaining a licence and the lack of tax exemptions for virtual assets, making fundraising challenging. He notes that some managers have already abandoned plans to apply for licences in Hong Kong, opting for more permissive regimes in Abu Dhabi and Dubai.
Hundreds of crypto funds managed by offshore managers, but with trading and execution teams based in Hong Kong, could be affected by the new dealing licensing requirement....Fund managers could be driven to move crypto trading and execution staff outside of Hong Kong.
Read the full piece in FT Ignites Asia here (subscription required).
