Hong Kong has announced that it will consult on a framework to be used for OTC crypto venues. The process will begin “very soon.”

In a Friday blog post, the Financial Services and Treasury Bureau (FSTB ) said that the consultation would cover outlets for virtual assets (VA), such as online platforms and shops.

The FSTB stated that “OTC venues played a role in fraud cases involving unlicensed VA platforms last year. They misled investors into channeling funds to these unlicensed trading platforms.” We believe it’s necessary to regulate OTC venues, and will soon launch a consultation on the proposed regulatory structure.

The bureau announced in October that it aimed to create a “vibrant ecosystem and sector” for virtual assets, following recent efforts to regulate this sector. The bureau implemented a licensing system for crypto companies in June of last year. Companies will have to get approval by June of this year in order to continue to operate in the country.

Hong Kong also consults about a regulatory system for stablecoin issues. The Hong Kong Monetary Authority would be required to issue a license for fiat-backed stablecoins.

Report: Hong Kong chief says regulators may get powers to crack down on unlicensed crypto exchanges

Sheldon Reback is the editor.