Hong Kong’s Securities Watchdog Working on Crypto Market Regulations, Calls Blanket Ban as Unnecessary

As regulatory measures in the cryptocurrency market are kicking-in all across the globe, this time the Hong Kong regulators are planning to introduce regulations to protect investors. Chairman of Hong Kong’s Securities and Futures Commission (SFC) - Carlson Tong Ka-shing - told the South China Morning Post (SCMP) about these recent developments.

However, he also noted that unlike China, the regulator doesn’t think that introducing a blanket ban is “necessarily the right approach”. He further added: “It will not work in today’s internet world when trading can cross national boundaries. Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”

However, Ka-shing further noted that a formal and legal framework is necessary for the domestic cryptocurrency trading. He further noted that the SFC regulatory body will have a careful approach towards this matter considering that is the emerging “new technology” and they have only been monitoring only securities till now.

Ka-shing also stressed that the process of digital currency trading doesn’t fall under the audit, custodian, or valuation requirements SFC’s Securities and Futures Ordinance. He further added: “We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”

The existing SFC chairman will soon pass on his position to Tim Lui Tim-leung on Oct. 19, this month. However, SCMP noted that the latest views from SFC chairman are welcomed by exchanges operating in Hong Kong’s cryptocurrency market.

Regulatory bodies from around the globe have been showing willingness to work in coordination with the regulators, especially after many exchanges reporting huge losses due to external attacks losing out millions of dollars in investor’s funds.

Moreover, the Hong Kong’s regulatory body is keeping a strict vigilance on the country’s crypto market. Earlier this year in March 2018, the authority introduced a blanket ban on ICOs citing “potential unauthorized promotional activities and unlicensed regulated activities.” The then SFC deputy termed ICOs to be dubious and downright frauds.