Hong Kong will soon implement clear-cut crypto regulations that will target cryptocurrency exchanges. The rules, which will govern the operations of crypto exchanges, come at a time when fund managers are grappling with tough requirements regarding crypto investment.
According to reports, the Hong Kong regulator, Securities and Futures Commission (SFC), aims to initiate a regulatory framework to govern all crypto exchanges in Hong Kong, in a bid to standardize the crypto exchange scene in the city. As Reuters puts it, the Head of the SFC, Ashley Alder revealed the plan today (November 6, 2019) at a fintech conference in Hong Kong.
“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,” Alder said.
As earlier reported in 2018, crypto exchanges in Hong Kong were facing increased regulatory inspection. In that period, the SFC announced that it was creating a new approach that would oversee the activities of local crypto exchange platforms.
Hong Kong Rules Target KYC and Custody
The SFC chief also revealed that the proposed regulatory structure would target Know Your Customer (KYC) and custody obligations for crypto exchanges in the city. The move could prepare the way for the materialization of formally legalized digital exchange listings in the Chinese city.
Reacting to the report, Primitive Ventures co-founder, Dovey Wan remarked that the proposed regulations could see crypto exchanges such as Huobi being 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 introduction of standardized cryptocurrency exchange laws could help augment the city’s position on regulating instead of banning crypto trading. The former head of the SFC, Tong Ka-shing, is on record stating that outlawing crypto trading would not work. Crypto trading and ICOs are still outlawed in mainland China and many platforms are forced to relocate to other areas outside China. With regulated crypto trading in place, Hong Kong would present a radical shift from the policies in mainland China.
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