Revealed! China and Hong Kong's Strict Measures Against Crypto Use
China is stepping up its crackdown on the use of crypto for illegal transactions, while Hong Kong is moving towards regulation. With different steps, these two regions are showing a serious attitude towards the use of crypto in their financial systems. What does this mean for those of you involved in the crypto world?
China Tightens Crypto Usage
The Chinese government through SPP and SAFE has issued a strong warning against the use of Tether (USDT) for foreign currency transactions. They stated that the use of USDT as a medium of exchange between the yuan and other foreign currencies is illegal. This is part of their efforts to combat money laundering activities and illegal transactions. In some of the cases uncovered, perpetrators have used USDT to facilitate foreign currency exchanges of enormous value. For example, a crypto trader in Dubai was involved in illegal transactions worth more than $6 million. The trader was later sentenced to seven years in prison and fined 2.3 million yuan (about $322,000).
Hong Kong prepares to regulate stablecoins
Source: PYMNTS
Unlike China, Hong Kong is taking steps to regulate the use of stablecoins in a legal way. The Hong Kong government is proposing to implement a special license for issuers of fiat-referenced stablecoins (FRS). This license would ensure that any stablecoins in circulation are fully backed by reserves of equivalent value. Criteria for obtaining this license include segregation and secure storage of reserve assets, information disclosure, and periodic reporting. This move is expected to create a more regulated and secure environment for stablecoin users in Hong Kong.
South Korea and Europe Take Action
In South Korea, transparency is key. Starting in 2024, nearly 6,000 government officials are required to publicly disclose their crypto holdings. This is part of the ethics system for public officials that aims to prevent conflicts of interest and increase public trust. Meanwhile, in Europe, the Council of Europe has adopted new guidelines for the use of AI in journalism. The guidelines include responsibilities for technology providers, platforms and member states to ensure responsible implementation of AI in journalistic practices.
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With steps taken by China, Hong Kong, South Korea, and Europe, the crypto world is facing a new era of regulation and transparency. For those of you involved in the industry, it's important to understand the regulatory changes and adjust your strategies to operate within the legal boundaries.
