Financial regulators in Hong Kong will introduce clear cut rules to govern the operations of cryptocurrency exchanges. Meanwhile, reports show that fund managers continue to struggle with the stringent requirements for crypto investment in Hong Kong.
SFC To Regularize Hong Kong Cryptocurrency Exchange Scene
According to Reuters, Hong Kong’s Securities and Futures Commission (SFC) is ready to introduce a regulatory framework for cryptocurrency exchanges in the city. Speaking at a fintech conference on Wednesday (November 6, 2019) in Hong Kong, Ashley Alder, head of the SFC remarked:
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The framework will enable virtual asset trading platforms to be regulated by the SFC, a major development which builds on a way forward I outlined at the same time last year.
Back in 2018, Bitcoinist reported that cryptocurrency exchanges in Hong Kong were coming under increased regulatory scrutiny. At the time, the SFC revealed that it was developing a new approach to overseeing the activities of local crypto exchange platforms.
New Rules Will Cover KYC and Custody
According to Alder, the new regulatory framework will focus on know your customer (KYC) and custody requirements for cryptocurrency exchanges. Such a move could pave the way for the emergence of formally legalized cryptocurrency exchange listings in the city.
Tweeting on Wednesday, Primitive Ventures co-founder and Chinese crypto insider, Dovey Wan remarked that the incoming regulations could see the likes of Huobi becoming the first “legalized Chinese cryptocurrency exchange.”
WOW this is BIG
Hongkong SEC will announce detail in abt an hour regarding cryptocurrency exchange application criteria
Considering Huobi has already backdoor listed on HKex, this will def play them a huge favor to be the first legalized Chinese crypto exchange
— Dovey 以德服人 Wan (@DoveyWan) November 6, 2019
The emergence of regularized cryptocurrency exchange laws will also solidify Hong Kong’s stance on regulating rather than banning crypto trading. As previously reported by Bitcoinist, the former head of the SFC Carlson Tong Ka-shing once stated that a ban on crypto trading would not work.
Like ICOs, crypto trading is still banned in mainland China, with many platforms forced to move outside of the country. Regulated crypto trading in Hong Kong will present another departure from the policies operating in mainland China.
Fund Managers Struggle with Licensing Issues
While the city appears to be moving forward with crypto exchange laws, another virtual currency-related regulation isn’t yet having its desired effect. In 2018, the SFC introduced a licensing scheme for crypto fund managers.
However, reports suggest that one year on, fund managers are still struggling to satisfy the regulatory requirements for them to invest in cryptocurrencies. Some commentators say despite the initial excitement brought on by the SFC’s move, there hasn’t been much in the way of progress for fund managers to obtain the necessary clearance.
Do you agree with the HMRC’s position that cryptocurrencies like bitcoin do not constitute money or currency? Let us know in the comments below.
Images via Shutterstock, Twitter: @DoveyWan
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