Hong Kong’s financial regulators will introduce a new framework for cryptocurrency exchanges, after the unsuccessful first attempt from last year. An official from the Securities and Futures Commission (SFC) in the city informed that the new version should be published today.
Hong Kong To Regulate Crypto Exchanges
During a FinTech conference taking place in Hong Kong, the head of the SFC, Ashely Alder, announced that they will issue a new regulatory format. Purportedly, by including know-your-customer rules, as well as such for the storage of crypto and security protocols, this framework would increase investor protection. Alder discussed the initial structure from last year and added:
“The framework will enable virtual asset trading platforms to be regulated by the SFC, a major development which builds on a way forward I outlined at the same time last year.”
Hong Kong is also going through serious turmoil with protesters challenging the current situation in the region and the involvement of mainland China. Some banks recently got attacked, and ATMs destroyed, which brought serious attention towards Bitcoin, causing the trading volume in the country to spike notably.
Unsuccessful First Attempt To Regulate Crypto
As cryptocurrencies make their way into the financial world, regulatory watchdogs are starting to channel their attention and regulate them in specific ways. Hong Kong was among the first ones that came up with a proposition on the matter. The SFC published a license last year that provided fund managers of virtual assets permission to sell digital products to potential investors.
While the idea might sound like a step forward in the right direction, as far as regulation is concerned, a year later, the results are not as expected. Very few fund managers managed to go through the requirements and get approved, and as per Reuters, only one was identified.
Reportedly, the regime in Hong Kong might have something to do with the low number of approved participants. Some market players are supposedly sending funds in offshore jurisdictions to avoid SFC regulations, which may be a possible reason for the new version of the framework, which is set to be published today.