Hong Kong Securities Regulator Looks at Official Crypto Exchange Rules
Hong Kong’s securities regulator, the Securities and Futures Commission (SFC), is considering drawing up new regulations for local crypto exchanges in a bid to safeguard investors from risks in the space.
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Open-Minded SFC Is Taking Stock
In a new interview, current SFC chairman Carlson Tong Ka-shing stressed that the commission was not seriously considering any comprehensive ban on local crypto exchanges but was instead mulling over formalizing a constructive legal framework to protect investors.
The SFC chairman emphasized that an absolute ban on such enterprises would ultimately be fruitless, as cryptocurrencies are not restricted by geographic or jurisdictional limitations.
“It will not work in today’s internet world when trading can cross national boundaries,” Tong noted. “If we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”
Echoing sentiments expressed by financial regulators across the world, the chairman said the cryptocurrency exchange industry required a meticulous and nuanced regulatory approach, insofar as cryptocurrencies “may not qualify as securities” in the traditional sense of the word.
However, Tong didn’t provide an exact timeline in his latest remarks on when a possible crypto-centric framework might be prepared by the SFC.
Trying to Figure This Space Out Not Unique, But SFC Wants to Be a First Mover
Tong said the SFC aims to set an example by nurturing a thriving crypto sector that is fairly regulated. If such a vision actualizes in short order, it would come at a time when most countries around the world are still busy pondering how to approach the cryptoeconomy.
To that end, Tong added:
“[…] no other international market currently has a comprehensive regulation framework for these cryptocurrency platforms. We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”
In Recent Hong Kong News
The biggest Hong Kong-related news as of late was crypto miner manufacturing titan Bitmain applying for its IPO there in late September 2018.
That move confirmed months of rumors that suggested Bitmain had been eyeing the global economic hub for its IPO. An influential player in the space, Bitmain seems likely to inspire other crypto enterprises to entertain similar economic centerings in Hong Kong in the years ahead.
In July, the Hong Kong Monetary Authority — the locale’s central bankers — announced its participation in a blockchain-backed trading platform designed to facilitate growth among small and medium-sized enterprises (SMEs).
One month prior to that, Overstock’s blockchain innovation subsidiary tZERO saw Hong Kong-based GSR Capital agree to invest $160 million USD in tZERO’s Security Token Offering (STO).
With these early murmurs, it looks like Hong Kong’s cryptocurrency and blockchain dealings are only just beginning.
Will clearer regulations for cryptocurrency exchanges bring more legitimacy to them? Share your views in the comments section.
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