Hong Kong, along with the EU, US, South Korea, and Singapore, will tighten virtual currency regulations in 2023, report announced

Governments around the world have stepped up scrutiny of cryptocurrencies over the past year following a series of meltdowns, with many stepping up consumer protections in the volatile sector.

Seventeen jurisdictions will tighten crypto regulations in 2023, including Hong Kong, the European Union, South Korea, Singapore, and the United States, according to a report released Monday by blockchain analysis firm TRM Labs.

According to TRM Labs, 80% of the 21 jurisdictions it surveyed have increased protections, and the latter account for 70% of global crypto exposure.

In 2022, the collapse of several major cryptocurrency platforms, including the stablecoin TerraUSD and the exchange FTX, led to a market crash that wiped out trillions of dollars in value.

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While 2023 began with the crypto ecosystem in “disarray with the collapse of FTX,” the subsequent 12 months saw “an extraordinary regulatory boom across the globe,” the report said.

In a notable development, the company noted that the European Union’s crypto market regulations came into effect in June last year, and Hong Kong’s new licensing regime for centralized crypto asset exchanges was in full swing.

Singapore, which the report describes as an “early adopter of cryptocurrency regulation,” last November issued a set of rules aimed at curbing retail speculation in cryptocurrencies and finalized rules on stablecoins.

Meanwhile, South Korea and Australia also increased scrutiny of their crypto sectors last year, the report said.

In the United States, the Securities and Exchange Commission will strengthen enforcement actions against virtual currency companies in 2023, and the House Financial Services Committee announced in July last year that it will create a federal regulatory framework for the virtual currency market, with a particular focus on stablecoins. A bill was introduced with this purpose.

According to TRM Labs, nearly half of the jurisdictions that strengthened their crypto regulations in 2023 strengthened consumer protection measures.

Additionally, international organizations including the G20, the Financial Action Task Force, the Financial Stability Board, the International Monetary Fund, and the International Organization of Securities Commissions are all developing global frameworks and policy recommendations to regulate virtual currencies. Also mentioned.

With the goal of becoming a global hub for the crypto asset sector in October 2022, Hong Kong has announced major initiatives to support the crypto asset sector. introduced a compulsory licensing system for

So far, 11 companies have applied for licenses in the city, including OKX, the largest company by trading volume.