Hong Kong DeFi Crowd Deflated After SFC Official Suggests Regulation
Hong Kong Security and Futures Commission (SFC) official Cai Zhonghui said that DeFi projects will have to be regulated. The official made the remarks at an ongoing Web3 Festival.
DEXs to Face Licensing Challenges
When it comes to the specifics, Zhonghui also said that decentralized exchanges would have to apply for licenses. This may be problematic, as a single centralized structure does not run such exchanges. Some exchanges have already begun the application for a license.
DeFi Projects May Not Be As Decentralized As They Seem
Zhonghui did also say that many DeFi projects are not decentralized and that, in these cases, only a small group was in charge of most tokens. Wu Blockchain also stated that Zhongui remarked that the “SFC must ignore their superficial statements to study the substantive content.”
Web3 Festival Highlights Burgeoning Industry
The Web3 Festival is currently taking place in Hong Kong and promotes the burgeoning Web3 industry. The festival will see over 300 speakers and 80 projects attend.
Hong Kong Remains Pro-Crypto
The statements by Zhonghui are particularly notable, considering that Hong Kong has been warming up to crypto over the past six months. The region is attempting to become something of a crypto hub and has taken many steps in that regard.
DeFi in Hong Kong to Continue, Despite Remarks
Given the sharp rise in interest in the crypto industry, it’s interesting to see how Zhonghui’s remarks will be taken. DeFi has proven to be a pain point for regulators around the world. However, it hasn’t stopped the sector from growing.
In conclusion, while the remarks from SFC official Cai Zhonghui have introduced some uncertainty in Hong Kong’s DeFi sector, the region’s overall pro-crypto stance remains strong. It remains to be seen how these potential regulatory measures will impact the growth of DeFi projects and decentralized exchanges in the area. However, the industry is likely to continue its expansion until concrete regulations are put in place, reflecting the global trend of authorities grappling with the challenges of regulating the rapidly-evolving crypto and DeFi sectors.