Hong Kong Regulator Unveils News Rules To Govern Funds
Hong Kong is the latest jurisdiction to provide guidelines for funding. The impending adoption of cryptos might persuade some countries to enact laws.
SFC Projected To Fully Regulate Exchanges In Hong Kong
Hong Kong cryptocurrency sector has received new guidelines for funds in the industry. The local regulator released the guidelines on Thursday as part of an initiative to officially regulate trading platforms.
Over the years, the SFC has been making strategic steps regarding the regulation of cryptocurrencies. According to Ashley Alder from the regulator, the main goal was to formally control the cryptocurrency sector. The SFC mandate also covers China.
Hong Kong seems to be approaching the regulation debate in a unique manner compared to China. Unlike China, Hong Kong has legalized crypto asset trading platforms and related activities. However, official regulation has not been unveiled fully.
Speaking to Bloomberg on Thursday, Alder stated that at the moment, regulations might not be watertight due to the nature of the crypto market. He said that the sector is still growing and laws might be faulty at some point. The market is characterized by outages and cases of price manipulations.
The latest regulatory proposal deals with fund managers investing over 10% of their digital assets, with firms dealing with professional traders able to be part of the sandbox scheme structured to open up development of new products and services.
For other groups, the process of acquiring permits will entail informing the regulator about their business practices. A statement by the SFC states that the new proposal is aimed towards protecting investors in the digital asset space.
In the coming days, all crypto exchanges might be regulated by the SFC. Hong Kong is making major strides in setting up regulations with other regions following the same path. The regulations come at a time when major cryptos like bitcoin are stabilizing in the market. Additionally, many believe that the adoption of cryptos on a large scale is around hence the need for laws.
Just last week, Taiwan revealed that it will unveil relevant laws for the ICO sector by June 2019. Before the announcement, Taiwan had resolved not to provide any regulations on the sector. Many experts believe that regulations will help push the adoption of cryptos. Some jurisdictions have enacted strict laws for the sector while other have remained ambiguous.