Legal watchdogs across the world do not afford to leave any way that can effectively regulate cryptocurrency market. As such the latest report unveiled that Hong Kong is considering more stiffen regulations to pull off the crypto firms, traders and other enthusiasts under the guidelines of the Securities and Future Commissions.
HongKong Frames Better Regulatory Approach
China has already banned many crypto activities within the nation, India is strictly opposed to business and banks dealing with cryptocurrencies and many more countries are following the suit. However, HongKong seems to form a regulatory framework a way better than other regions. The announcement read its new guidelines as follows;
According to the SFC’s guidelines, investment funds will be required to obtain a license if more than 10% of the assets they manage are made up of bitcoin or other cryptocurrencies, and will be allowed to sell related products only to professional investors.
With this new license schemes, trading platforms will review the decentralized products and services in so-called ‘regulatory sandbox’ ahead of getting the license. However, the new licensing framework is still in process. It poses various requirements for the ICO projects including the tokens must have lived the period of at least a year. Accordingly, companies upon filling up the SEC’s guidelines can raise funds for tokens through ICO.
Nevertheless, the growing number of spam ICOs and also the tokens that don’t even existed have encouraged regulators to announce tighten regulations. This is not the first time, SFC is heading up with such strict move, but in early 2018, various exchanges have received warning letters from SFC since many investors claimed that their funds are struck within exchange’s account. In consequence, there are plentiful measures, Hong Kong has announced which also include identity verification, the global fight against money laundering and more.
Looking at the SFC’s decision, Timothy Loh, a citizen noted that
“The requirements of the SFC initiative may prove too burdensome for some operators” adding the core point that Some will decide not to join the new framework in order to maintain their current shares in the market.
What’s your opinion about SFC’s latest framework? Let’s discuss
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Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com