Hong Kong’s top financial observers plans to hire more employees as it increases its focus on the fast-growing virtual asset market. The Securities and Futures Commission (SFC) has outlined a proposal to bring on 15 new people, with over half dedicated to crypto regulation. This plan was revealed in the SFC’s budget proposal for the next financial period, which was recently presented to the Legislative Council.
The proposal marks a shift from earlier years, when the SFC did not grow its workforce in three out of five financial years starting in 2020. This time, the regulator believes added headcount is essential to deal with new challenges in the digital asset space. The SFC wants to improve market surveillance, strengthen enforcement, and ensure that it can properly evaluate the rising number of crypto firms seeking authorization to operate in Hong Kong.
According to the SFC’s budget plan, “Eight of the proposed new headcount is for enhancing the staffing support for virtual asset regulatory regimes, market surveillance and enforcement investigations.” The commission expects these hires to help it manage the workload generated by the city’s evolving rules on digital assets, including the licensing framework for cryptocurrency trading platforms.
Hong Kong has been promoting itself as a place where legitimate crypto activities can thrive under strict oversight. In June 2023, the government launched a licensing scheme named “virtual asset trading platforms,” or VATPs. This allows platforms to offer crypto services to retail users.
The regulator is also looking to supervise stablecoins, which are cryptocurrencies meant to maintain a stable value. Government officials have been discussing for bill details for stablecoin operators. Under this planned regulation, providers will need specific approval to offer stablecoins in Hong Kong. Officials hope that these step will protect investors and regain confidence in the local crypto market.
At the same time, the city’s finances are under pressure. Government projections suggest a budget deficit of around HK$100 million (about US$13 million) this year. Despite that challenge, the SFC has prioritized building a stronger team to oversee virtual assets. Much of the commission’s expected spending increase reflects higher staff costs, including salary adjustments. The SFC noted that its staff sometimes have to take on extra duties, which is why it did fewer on-site inspections of licensed firms last year than it had initially planned.
Hong Kong’s securities regulator has acknowledged that effective supervision of digital assets requires more resources. As part of its strategy to keep up with a sector known for rapid changes, the SFC has been talking directly with senior executives of crypto companies. In a previous statement, the commission said, “We have been proactively engaging with VATPs’ senior management and ultimate controllers,” which helps speed up the approval process and ensure that these platforms meet all requirements.
Recent data suggests the SFC has been granting licenses to more crypto trading sites that comply with local rules. In January, SFC approved two additional platforms. The total number of licensed operations raised to nine. This growth emphasizes Hong Kong’s ambition to become a regulated place for digital assets. The SFC’s latest plan shows that, despite budget difficulties, the city remains set on building a controlled environment for crypto firms to grow under a legal attachment.