Hong Kong plans to introduce cryptographic regulation. Such a measure is necessary to protect the interests of investors. Information about this appeared in the Hong Kong newspaper "South China Morning Post" on October 15. A statement was made by the chairman of the Hong Kong Securities and Futures Commission (SFC), leaving office on October 19. Tong Ka-shing noted that the Commission does not have a focus on a total ban, as happened on the mainland of China, since "prohibitive measures are not always correct and fair."
“We do not think imposing a total ban on these platforms is necessarily the right approach, and it will not work in today’s internet world when trading can cross national boundaries” Tong Ka-shing considers it necessary to solve the issue of regulation of the crypto exchange market, and the SFC will take very reasonable measures, because the exchange platforms are innovative technologies and cannot be clearly interpreted as securities.
Currently, crypto exchanges are outside the influence of the SFC. But Tong proposes to equate them to traditional trading platforms.
“The SFC is obliged to find out whether it is possible to regulate new platforms using standards that are applicable to licensed exchanges and, at the same time, take into account the interests of investors.”
So far, the Hong Kong regulator has expressed at least twice the concern and warned the general public about the high risks of investing in cryptocurrency and ICOs. The SFC called on investors to objectively evaluate potential risks and exercise due diligence. And ICOs are considered as securities.
In July of this year, in its annual report, the Securities and Futures Commission stated that “it is closely following the crypto market and the ICOs and is ready to intervene at any time when such a need arises.”
Companies operating in the Hong Kong crypto market have spoken favorably of the SFC initiatives.
Angelina Kwan, Chief Operating Officer of BitMEX, one of the world's largest cryptocurrency platforms, said she expects, in the proposed circumstances, to have mutually beneficial cooperation with the SFC. "We hope that the actions of the regulator will correspond to the dynamics of the market," she said in a telephone conversation at the South China Morning Post.
Jeremy Allaire, founder and CEO of American Circle, stressed that his Hong Kong branch currently offers over the counter trading of valuable digital assets such as BTC and ETH. At the same time, the company realizes that it operates in an unregulated legal field.
“We will pay attention to the new rules of the regulators and look forward to working closely with the government in the proposed legal boundaries,” he said. “We are aware of the existence of real risks for investors and stand for rules that minimize them. Therefore, we make every effort to develop a constructive position in relation to the regulators of all jurisdictions in whose zone of influence we are.”
Circle is largely funded by Chinese investors, including Bitmain, Baidu, Creditease, and Goldman Sachs investment bank.
“From the very beginning of our activities, we have assumed the responsibility to cooperate with governments and regulators,” Allaire added. “We want to provide the digital asset industry with a long term perspective.”
Hong Kong regulators have consistent policies and are developing measures to keep the fast growing market under control. And the new Commission Chairman, Tim Lui Tim-leung, is unlikely to deviate from the planned path.