Huobi Technology discusses the outlook for the 2022 global regulatory landscape

March 23, 2022,Huobi Technology Holdings Co., Ltd.（“Huobi Technology” (Stock code: 1611.HK) Compliance Director Elaine Sun was invited to attend the event hosted by EmergentXDigital Asset Online Summit 2022（EmergentX Digital Asset Virtual Summit 2022), and shared industry insights and opinions during a discussion on the topic of “How Market Participants Can Best Position Yourself in Regulatory Change and Innovation”.

The summit brought together innovative companies and experts from the virtual asset, fintech, and traditional finance industries to discuss the trends and prospects of the virtual asset and blockchain industry. Among them, guests attending the discussion with Huobi Technology included Worldpay Legal Vice President Adrian Clevenot, Freshfields Bruckhaus Deringer Advisor Kenneth Hui, Senior Digital Asset Lawyer Daniel Lai, and hosted by Kat Kukreja, Co-Chairman of the Blockchain Committee of the Hong Kong Fintech Association.

Collaborate with the industry to establish friendly communication with regulators

The market value of virtual assets repeatedly reached new highs in 2021. More than 100 countries participated in the central bank's digital currency issuance, and regulators and institutional investors around the world are increasingly participating in the virtual asset market. As the virtual asset market continues to expand in size and influence, Elaine said that the most important task for global regulators is to improve a sound and clear industry regulatory landscape. It is worth mentioning that since this year in Hong Kong, China, various government agencies have repeatedly reaffirmed the establishment of a virtual asset service provider (VASP) licensing system, thereby further clarifying the scope of supervision.

Speaking about strengthening the confidence of regulators in the industry, Elaine mentioned that not long ago, the Crypto Market Integrity Alliance (CMIC), led by Solidus Labs and co-sponsored by leading virtual asset companies such as Huobi Technology and Coinbase, was formally established. She said, “CMIC builds the confidence of regulators and investors in virtual assets through the coalition's agreed accountability system, transparency, and definition of market abuse and manipulation. In the future, we will compile good practices into industry standards by organizing training programs on relevant knowledge and codes of conduct and encouraging members to share industry research and opinions. We would prefer to collaborate with the industry in an open and sincere dialogue with regulators to promote the establishment of a regulatory framework.”

Institutional investors are entering the market faster, and licensed institutions have a significant first-mover advantage

Regarding the relationship between traditional financial institutions and the virtual asset industry, Elaine said that more and more institutions have begun or are considering incorporating assets such as Bitcoin or Ethereum into their portfolios or platforms. More institutional investors choose to cooperate through licensed institutions due to safety and compliance considerations, and pay attention to the reputation risk and risk levels of partner institutions. As one of the earliest virtual asset management companies in Hong Kong to obtain Class 4 and Class 9 licenses issued by SFC, Huobi Technology will actively utilize its first-mover advantage and conduct in-depth research on emerging products. We look forward to cooperating with more institutional investors in the market in the future.

Referring to Hong Kong's compliance process, Elaine said that although the current regulations still require licensed service providers to provide services only to professional investors, the joint circular issued by the Hong Kong Monetary Authority (HKMA) and the Hong Kong Securities and futures Commission (SFC) in January this year also mentioned that some virtual asset-related derivatives are currently traded on regulated exchanges specified by the SFC, and in terms of exchange-traded virtual asset derivatives funds, such funds have been approved or approved by relevant regulators in designated jurisdictions (including Australia, the United Kingdom and the United States) Sold to retail investors. It can be seen that regulators hope to expand various possibilities for the development of the industry when risks are manageable.

As a leading one-stop virtual asset service platform, the virtual asset ecosystem developed by Huobi Technology provides institutional investors with compliant and secure closed-loop services with priority compliance and diversified business to meet investors' needs for asset management, trust and custody, OTC, lending, and exchanges. In the future, Huobi Technology will also join hands with the industry to advance the global compliance process.

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