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While a plethora of news over China’s cryptocurrency industry have generated a rather bleak public perception, local associations seem intent to circumvent current obstacles put in place by the government.

In the midst of China’s ongoing crackdown on ICOs, and on crypto as a whole, Hong Kong is taking steps to induce a safer and more legitimate trading environment. While it is fair to wonder if China’s actions will affect Hong Hong’s approach, the SFC is taking appropriate steps to improve the outlook of cryptocurrencies in the region.

As more intriguing clues continue to flood the market, industry leaders have weighed in on their views for the crypto space, and the ways in which individuals and companies are acting to maintain their crypto related activities.

Self-Regulatory Organization to Oversee Industry

The National Internet Finance Association (NIFA) of China, has publicly committed to increase its oversight on ICOs, working in collaboration with Chinese authorities. The announcement falls in line with the recently intensified Chinese cryptocurrency crackdown.

NIFA’s official statement included the following sentiment: “Special monitoring projects in 2017 included issuing warnings on virtual currencies, ICOs as well as ‘disguised’ ICOs. Moving forward, 2018 will be a critical year for the association to normalize and standardize its existing efforts put into these projects.”

According to an anonymous source of Finance Magnates, there has yet to be a strong impact on the crypto market, despite regulators’ crackdown efforts. While some exchanges are no longer accepting Chinese clients, existing users are still able to access their accounts.

The source continued by expressing the opinion that unless additional governments take a similar stance as China, the crypto market will continue to see growth. While regulation is desired and even encouraged, in order to weed out any unlawful activity, it is also important to find the balance that will not fully hinder the entire industry.

Spillover into Hong Kong?

In addition to NIFA’s voicing of its plans to tighten regulations over ICOs, Hong Kong’s regulators are showing signs of similar activity as well. Hong Kong’s Securities and Futures Commission (SFC) has proclaimed that it has sent 7 crypto exchanges warning letters, urging them to reassess some of the crypto assets being offered on their platforms.

The bottom line of the letters requests that the exchanges reclassify certain coins as securities tokens, and to consequently delist them from their exchange platforms. While Hong Kong has been relatively passive in its approach toward the industry’s regulatory framework, the timing of the SFC’s announcement induces questions over the potential influence of Chinese officials on the outlook of the crypto space in Hong Kong.

Chinese Crackdown Continues

Last week, the cryptocurrency market suffered a blow, dealt out by Chinese authorities, who officially banned access to crypto exchanges and websites from within the country.

China has been a leading adversary of the industry, shutting down ICOs, and placing confinements on a fast-growing financial market. In addition, the government has also outlawed the advertisement of leveraged FX trading, requiring Baidu to immediately halt any and all ads connected with the industry.

The repercussions of the government’s actions are still being assessed, and have yet to truly be quantified, but it certainly has led to a mass exodus attempt on behalf of Chinese investors from the crypto space.

Avner Ziv, CEO of Zotapay, offered his views of recent events. According to Ziv, China’s crackdown on cryptocurrencies falls in line with similar actions taken with respect to The Great Firewall of China. Local authorities and regulators have shown concerns with having a decentralized system, which falls out of the government’s controls.

Having their own managed crypto space is far more likely to be sustainable in China over the long run, which could be the direction that the country is headed in, as the current crackdown intensifies. Moreover, he likened the ban of exchanges to other technological companies and products. “It was the same with Google, Facebook, and What’sApp media platforms which the Chinese prohibited their usage at the beginning and then came up with their own alternative platforms controlled by them with similar services.”

Are Chinese Actions Positive in Long-Run?

Finance Magnates reached out to Lincoln Yin, Founder and CEO of Shanghai-based financial services firm RootAnt. Yin specified that some Chinese investors could bypass the government’s decision to block access to cryptocurrency websites, by using various tools to gain access to foreign websites.

Yin further elaborated: “As the market is too hot, I think the action from the government is not a totally bad thing, it is actually good for long-term. And this could protect some of those traders that don’t understand much about the market and set a not realistic expectation to the return. If this kind group of traders grows too large, it would be a social problem, which has been happened in China many times with other instruments before.”

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