The Hong Kong Securities and Exchanges Commission (SFC), known for being for the most lenient jurisdiction in the region for cryptocurrency regulation, is to impose tighter laws.
This is a process finding favor around the world currently as financial regulators adjust to cryptocurrency’s now permanent status in the global financial arena. To begin with, the SFC is suggesting a “temporary regulatory sandbox” for companies prior to seeking a license to operate.
Tighter regulation should come as no surprise to the Hong Kong cryptocurrency environment, as the government has warned on more than one occasion over the course of this year that stricter laws are on the way. Under new rules, if an investment fund has 10% or more of its funds in digital assets, it will need to obtain an operating license, providing it is only selling its products to professional investors.
The news of tighter controls on ICOs and exchanges has been greeted with complete approval by the industry as some feel that may not be in the interest of many local cryptocurrency firms. There are many pros and cons in tighter regulatory measures on the Hong Kong crypto scene. Although many consider it essential to safeguard investors and keep a lid on the industry, others believe that the new cryptocurrency laws could be costly and work against crypto firms there.
It could also be expensive, claims Daisuke Yasaku from the Daiwa Institute of Research: “The cost of regulations will be high. The requirements of the SFC initiative may prove too burdensome for some operators.”
A somewhat more carefree approach was taken by an individual investor on Hong Kong streets this weekend when Bitcoin entrepreneur Wong Ching-kit is thought to have been responsible for showering passing public with Hong Kong dollars, purportedly worth millions of US dollars, thrown from a rooftop above Fuk Wa Street.
The SFC is unlikely to be quite so liberal when finalizing Hong Kong’s new cryptocurrency laws. Such windfalls may not be quite as easy to attain with exchanges coming under tighter scrutiny in the new year.
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