Hong Kong says that it is looking to regulate all crypto activity from here on out. This is a massive distancing of itself when compared with the activity occurring in mainland China, which has largely sought to ban crypto activity outright.
Hong Kong Is Changing Its Attitude Towards Crypto
However, Hong Kong is looking to be a separate entity given the amount of protests regarding Chinese government interference that has taken place over the last two years. Thus, it makes sense that whatever mainland China is looking to accomplish, Hong Kong wishes to set its sights on the opposite.
The country’s financial watchdog has stated that while initially the region wanted to just opt in and accept all crypto-related trades and activities, there are several concerns that have come about as of late, big ones being money laundering and investor protections. Interestingly, this news comes after the fact that a “love scam” has been found within Hong Kong – one that targets individuals and looks to potentially cheat them out of their crypto funds.
Hong Kong is also different in that while the regulation will take precedence in the area, things will still be relatively “loose” when compared to other nations in Asia. For example, countries such as Japan and Singapore have deemed it necessary for all crypto exchanges and digital wallet companies to be regulated.
In Hong Kong, however, the area’s Securities and Futures Commission (SFC) has deemed only exchanges in the region that trade securities or tokens that can potentially be deemed securities should be regulated. Thus, a company that’s looking to just sell a commodity like bitcoin would not be subject to the same rules and laws.
Ashley Alder – chief executive of the SFC – explained in a recent speech:
This is a significant limitation, as under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security.
Things are starting to look a little different however, as from here on out, all cryptocurrency trading platforms that operate in Hong Kong or that target investors living within the region must apply for an SFC license. While there are several digital trading platforms stationed within Hong Kong, many have decided not to apply for licenses under the present regime. Now, it looks like that may be changing.
Issuing the Right Licenses
As it stands, the SFC has only agreed to issue a license to one crypto exchange at the time of writing. It’s a company called OSL Digital Securities, and it’s a unit of the BC Group, which is a division of Fidelity.
Bitcoin appears to have reacted positively to the news and exhibited a $300 jump over the past day.
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