Hong Kong is tightening its regulatory grip on cryptocurrency exchanges and related businesses by bringing them under the purview of the Securities and Futures Commission, as reported by Asia Nikkei Review on Dec. 17.Crypto-Financial Center.
While part of Chinese territory, Hong Kong follow a different judicial approach to the Mainland.
The move is contrary to Hong Kong's famed free-market approach towards businesses.
Growing concerns over fraud, money laundering, and a general lack of regulatory oversight have prompted the regulatory authorities to establish greater oversight over digital assets in the region.
Hong Kong established a fintech "Sandbox" in November to evaluate the effect of virtual currency businesses operating in the city, and consequently, the SFC determined that greater oversight was needed.
In October, after the sandbox assessment, the SFC passed a guideline stating all investment funds with more than 10 percent of their assets under management in cryptocurrencies and token-centric businesses must obtain a license.
As a financial center with proximity to China, access to the Far Eastern market, and liberal taxation policies, Hong Kong's actions reflect both its reputation in the global markets and the moves of leading economies in the world.
Daisuke Yasaku of the Daiwa Institute of Research believes Hong Kong is taking essential preventive steps.
Yasaku further notes exchanges should be transparent with their business models and revenue streams while cooperating with the SFC on monitoring and inspection.
Timothy Loh, a local lawyer, thinks the higher barrier to enter may deter crypto-businesses from setting up shop altogether in Hong Kong, leaving institutional investors waiting on the sidelines.
Hong Kong Tightens Regulatory Grip on Cryptocurrency Exchanges and Startups
gepubliceerd op Dec 17, 2018
by Cryptoslate | gepubliceerd op Coinage
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