Hong Kong Continues to Regulate Cryptocurrency Exchanges. Hong Kong may soon see a disruption in the cryptocurrency exchange sector as its Securities and Futures Commission (SFC) declare in their annual report that they will keep a close watch on crypto and Initial Coin Offerings (ICO). They also plan to intervene when appropriate and delve into other aspects of the cryptocurrency market and trading.

Hong Kong in search of Digital Asset Business:

Carlson Tong, appointed Chairman of the Securities and Futures Commission (SFC) by the HKSAR Chief Executive till 19 October 2018. Says that investors’ protection is the main reason for the agency’s move. He further adds that the SFC constraints only in regulating classified financial securities. Which means that the current rising demand for such an asset class will first have to be recognized as a security by the HK government. Hong Kong Continues to Regulate Cryptocurrency Exchanges.

Ka-Shing believes that the blanket ban will not be the answer to control money laundering and investor protection related issues. Since today’s world facilitates an easy transfer of data and provides access to global platforms, there should be a particular law or policies that impose restrictions.

Current Crypto Market:

The cryptocurrency exchange market has seen exponential growth over the past few years from being an unknown or untapped market to a significant sector in 2018. Billions of dollars are traded daily in 217 crypto-exchanges which are listed on CoinMarketCap, around $4.6 billion is handled by the world’s top five crypto-exchanges.

Even though these exchanges have higher success. They remain the hotspots for failure and a threat to the billions of dollars which trade daily. And which is not backed by a recognized framework in order to govern their operations, maintenance and security. 

SFC moves:

Due to the rise of the crypto market and illegal trading, SFC took action to caution numerous crypto-investors and exchanges in Hong Kong. The SFC further warned its users about the risks involved in trading digital assets, as well as about the legal actions the SFC may take if a business does not comply with SFC regulations.

Due to the uncertainty of the crypto market, Ka-Shing states that cryptocurrencies do not fit in the SFC’s valuation, audit, and custodian requirements as legally expected.

“No other international market currently has a comprehensive regulatory framework for these cryptocurrency platforms. We need to see if and how these platforms can be regulated. And to a standard that is comparable to that of a licensed trading venue. While at the same time ensuring investors interest has protected”        

                                                                                        – Carlson Tong, the Chairman of the SFC

Conclusion from SFC’s stance:

All major crypto exchanges and investors in the city have shown positive intent towards the agency’s move. Angelina Kwan, the chief operating officer of BitMEX. Welcomed the move and expressed that it would work in compliance with SFC regulations.

In a similar way, Jeremy Allaire, the founder of U.S.-based crypto-finance company Circle, expressed his views. On the move by launching over-the-counter (OTC) trading for cryptocurrencies like bitcoin and ether for its Hong Kong operations.


“Since we started the company, we have committed to collaborating with governments. We want to ensure the long-term potential of the digital asset industry.” 


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