By In what is a great piece of news for the cryptocurrency community, the chairman of Hong Kong’s securities regulator has ruled out a total ban on local crypto exchanges opting to go the route of formal regulations instead, in a move that is the opposite to that of China’s ban.
In reaction to the growing interest of cryptocurrencies such as bitcoin by the retail sector & investors, Hong Kong’s Securities and Futures Commission (SFC) is planning to regulate the cryptocurrency sector.
Chairman Tong Ka-shing when speaking recently to the South China Morning Post insisted that Hong Kong will not follow in the mainland’s footsteps by implementing a blanket ban on the crypto sector.
“We do not think imposing a total ban on these platforms is necessarily the right approach,”
said a senior official to the SCMP, insinuating that crypto traders will find ways overcome any barriers.
“Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets,” Tong stated.
The SFC is instead looking to implement a formal regulatory framework for local crypto trading despite the fact the crypto sector falls beyond the SFC’s authority which only extends to securities.
Tong argued that cryptocurrency trading does not fall upon the custodian, audit or valuation requirements under the SFC’s Securities and Futures Ordinance. They “may not qualify as securities,” said Tong.
Tong added:
“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.”
Tong’s suggestion has been praised and welcomed by local exchanges in Hong Kong. Tong’s report mentions Circle who, of course, has an HQ in Hong Kong as well BitMex who had previously hired a former regulator as operations chief, both who are ecstatic about the announcement of regulations.
Could this mark the end of the scrutiny faced by Hong Kong’s crypto market? Just in March, authorities shut down an initial coin offering (ICO) citing “potential unauthorized promotional activities and unlicensed regulated activities” and following that SFC deputy July Leung referred to ICO’s as “dubious, downright frauds”.
Perhaps the SFC’s decision to investigate regulation could mark the signs of a new crypto haven in Hong Kong? Let us know thoughts.
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