The Chairman of the Hong Kong SFC (Securities and Futures Commission) Carlson Tong Ka-Shing has confirmed that his agency is about to introduce a new set of regulations, governing the trading of cryptocurrencies - a move said to be in the name of protecting investors. The announcement was made via a small, far east media agency, The South China Morning Post before being broadcast to the wider world.
Whilst Ka-Shing is all for in the implementation of tighter regulations in Hong Kong, he does not back a total ban on the trading of crypto, as is the case in Mainland China. It is felt that it simply would not be a realistic stance, given the unregulated nature of the internet as a whole. This means that a much more flexible approach is preferred - one that will protect those wishing to invest in this new paradigm of the financial world.
Non Securities Status
Due to the fact that cryptocurrencies are not be deemed as having securities status, he reported that they do not fall under the auspices of the SFC and as such, what’s necessary is the forming of a regulatory structure that’s not too restrictive. He also went on to say that the reason for this is that should they be too severe, they would not be effective, meaning a ban cryptocurrency trading in Hong Kong simply would not work.
The plan for the immediate future in Hong Kong is to create a regulated platform that is conducive to licensed trading, whilst at the same time looking after investor interests.
What’s encouraging is that the leaders involved in the Hong Kong crypto markets are fully behind the solution being proposed by the SFC, having an almost entirely positive view of the intended changes. This is a view shared by Jeremy Allaire, CEO and founder of CIRCLE, the digital currency who has confirmed that his enterprise would be more than happy to work with the SFC, as did Bitmex’sAngelina Kwan.
A Reserved Approach
Whilst Hong Kong is a long way from having the kind of hard line stance towards crypto that’s taken in Beijing, it’s important to note that there are still many not in favour of initial coin offerings (ICOs) that are used to fund new crypto ventures. The regulatory bodies in Hong Kong have previously issued warnings on two occasions against using ICOs to invest in cryptocurrencies, as they are unregulated and can be hazardous to your financial health.
The reigns of the SFC are to be handed over to new incumbent Tim Lui Tim-Leung as of the 19th of October, but the stance of the organisation will remain the same. Leung believes in the same way as outgoing chairman Carlson Tong Ka-Shing, that helping the cryptocurrency markets in Hong Kong to succeed will ultimately be a good move for the country and it’s governors in China - as long as investors are given a sufficient degree of protection.
We shall get a clearer view of how well performing these new measures have been in the coming months.