Hong Kong is considering allowing the Securities and Futures Commission (SFC) to participate in the regulation of over-the-counter (OTC) virtual asset trading services. Sources have revealed that the SFC has consulted industry players on a potential new licensing regime for crypto OTC services. Under this regime, the SFC would collaborate with the Hong Kong Customs and Excise Department (C&ED) to oversee the corresponding companies. Previously, in a proposal published in February 2024, the planned OTC regulatory and licensing regime was solely under the purview of C&ED. Sources also indicated that the SFC has been soliciting feedback from relevant companies on introducing a new licensing regime for cryptocurrency custodial services in recent months. Currently, discussions regarding these two licensing regimes are still in their early stages and subject to change. An SFC spokesperson stated on September 12 that, to foster the sustainable and responsible development of Hong Kong's virtual asset industry, the SFC is working closely with the government and other regulators to establish a sound, clear, and consistent regulatory environment in Hong Kong. (SCMP)