Despite Hong Kong's progress with cryptocurrency adoption, mainland China has not changed its anti-crypto stance in terms of local regulations, according to CPIC Investment Management CEO Chenggang Zhou. While some Chinese state-affiliated banks have opened bank accounts to serve crypto clients in Hong Kong and CPIC launched two cryptocurrency funds in April, Zhou emphasized that CPIC operates as a Hong Kong entity regulated by the Securities and Futures Commission and that Hong Kong regulations allow them to invest in different markets or asset classes, including cryptocurrencies. Zhou doesn't expect the Chinese government to change its crypto policies in the foreseeable future, and Lesperance & Associates founder David Lesperance noted that the crypto market in mainland China is "still effectively shut down."

The United States White House has released a national standards strategy for key and emerging technologies, which includes distributed ledger technology (DLT) and digital identity infrastructure.

Governments worldwide are implementing regulatory frameworks for crypto regulation, with some cracking down on the sector while others welcome crypto with appropriate rules and guidelines. The South Korean government is partnering with law firm Yulchon to tighten oversight of the country's crypto sector, which has heavy exposure to the digital asset class, and the cryptocurrency bill is expected to become law this year. Meanwhile, Hong Kong's vision of becoming a crypto hub is threatened by the increasing number of crypto-related scams, and lawyers are working with regulators to balance investor protection and innovation.

Crypto scammers have reportedly stolen over $1 million from two elderly people in Hong Kong. The scammers reportedly posed as law enforcement officials and convinced the victims to transfer their digital assets to a fake account in order to avoid charges related to money laundering and other crimes.

Hong Kong urged banks to provide services to licensed virtual-asset firms, part of the city’s push to become a crypto hub and a stance that contrasts with a crackdown on the digital-asset sector in the US.

The Hong Kong Monetary Authority (HKMA) has emphasized that the initial focus of regulating cryptocurrencies in 2023 would be stablecoins that represent themselves as being linked to the value of one or more legal currencies.

US-based crypto exchanges lost market share in the 2023 Q1 as trading volumes continue to fall amid the crypto crackdown.

Hong Kong's central bank, the Hong Kong Monetary Authority (HKMA), has reminded banks that they can provide banking services to virtual asset (VA) companies, as some businesses have complained about the difficulty of opening bank accounts in the jurisdiction. The HKMA has encouraged banks to use a "risk-based approach" when conducting due diligence and avoid one-size-fits-all approaches to rejecting account opening applications. In a bid to attract more companies to the jurisdiction, Hong Kong has been providing virtual asset services providers with more regulatory clarity. The HKMA has also released a circular clarifying best practices for offering banking services.<br>(By&nbsp;Lavender Au)

The proposed regulatory changes seek to simplify how DeFi returns are taxed and reduce the “administrative burden” for taxpayers.

Regulators in Hong Kong are urging banks to provide services to licensed crypto firms as part of the city's plans to establish itself as a crypto hub. In a circular released by the Hong Kong Monetary Authority, banks are asked to support regulated crypto businesses with "their legitimate need for bank accounts" and to avoid the "wholesale de-risking approach" that turns away new industries. Hong Kong will unveil its new licensing regime on June 1, after which it plans to allow retail investors to trade major cryptocurrencies like Bitcoin and Ethereum. The Hong Kong regulator is also planning to release rules and regulations for crypto exchanges soon. (coingape)