Hong Kong’s financial markets regulator, the Securities and Futures Commission (SFC), announces a new licensing system for cryptocurrency trading platforms operating in the city.
A Reuters report mentioned that during the Fintech Week event, Ashley Alder, the Chief Executive Officer of the SFC, stated that that the regulation will be applied to all trading platforms despite security token trading.
The report adds,
Hong Kong will require all cryptocurrency trading platforms to be regulated whether or not they trade securities.
SFC’s position paper and regulatory guidance 2019
The SFC released a position paper on November 6, 2019. The position paper mentions the need for a crypto trading platform in the country to register with SFC. Moreover, the crypto trading platform would fall within the SFC jurisdiction and require a license only if it offers regulation to trading in at least one security token, as per the position paper.
The SFC also released a regulatory guidance report for crypto fund managers in the country last year. The report mentions that all the cryptocurrency fund managers must have steady liquid capital of HK$3 million at a minimum. While also being an independent and functional custodian.
Moreover, Hong Kong has become one of the best crypto-regulated countries. Furthermore, the strict regulatory ecosystem in Hong Kong has made a lot of investors to turn away from the area. Yet, it has attracted other investors who are looking for security regulation offers.
However, the regulator’s approach in regulating cryptocurrency exchanges in Hong Kong today could see an amendment to last year’s regulation. Recently, a fidelity-backed OSL crypto exchange acquires License from Hong Kong’s SFC.