Hong Kong’s Securities and Futures Fee (SFC) has introduced plans to replace its framework on cryptocurrency gross sales and necessities amid the evolving market growth of the digital asset trade.
Within the regulator’s upcoming amendment notice printed on October 20, 5 main components have been addressed with respect to the crypto trade.
These embrace distributing digital property (VA)-related merchandise and the supply of crypto dealing providers, asset administration platforms, advisory providers, and implementation steps.
SFC burdened that whereas the unfold of VA has scaled previous areas and elevated in reputation, the worldwide regulatory panorama stays uneven.
The dangers related to investing in digital property, akin to anti-money laundering (AML) and counter-financing terrorism (CFT), are nonetheless current.
Nevertheless, the SFC and Hong Kong authorities prioritize investor safety because of the burgeoning progress of the cryptocurrency regulatory panorama.
This shall be adopted with up to date stringent measures and necessities to curb dangers related to these property.
The great modification discover said that restrictions can be imposed on promoting some property.
For instance, VA-related complicated merchandise, like crypto exchange-traded funds and merchandise exterior Hong Kong, will solely be accessible to skilled traders.
As well as, intermediaries linked with the crypto house will assess whether or not traders have substantial data about buying and selling in VAs earlier than executing any transactions.
Oversight of Hong Kong’s Newest Regulatory Panorama
At press time, there isn’t a particular legislative coverage in Hong Kong that regulates digital property (VA), and no company is tasked with scrutinizing the evolving market panorama.
Nevertheless, a number of monetary regulators have launched pointers to supervise the trade. These embrace the Hong Kong Financial Authority (HKMA), Securities and Futures Fee (SFC), and Insurance coverage Authority (IA).
If a VA has safety traits as clarified below Cap 571 of Hong Kong’s Securities and Futures Ordinance (SFO), it is going to be regulated by the SFC and related legal guidelines.
The most recent guideline discover got here after a collection of complaints by over 2,300 customers of the JPEX crypto trade, which entails losses of funds and property price hundreds of thousands of {dollars}.
The SFC revealed that the Dubai-based buying and selling platform had operated and not using a license for VA buying and selling.
Investigation revealed that almost all victims have been beginner traders who have been promised huge yields. The fake trade collaborated with influencers to promote unregistered services and products.
To forestall the reoccurrence of the JPEX scandal and supply traders with customary safety, the SFC partnered with the Hong Kong Police Pressure (HKPF) to arrange a crypto-centric group for illicit actions.
Based on the official announcement on October 4, the brand new group will proceed investigating the JPEX scandals, and extra arrests will observe.
