The Securities and Futures Commission of Hong Kong has announced its intention to pass laws covering blockchain businesses, including cryptocurrency platforms.
“We hope to encourage the responsible use of new technologies”
Currently, only tokens which meet the definitions of security/futures contracts are supervised by the SFC. This has left a big hole for certain businesses to slip though and operate without supervision. By defining all those that distribute funds in Hong Kong as portfolio managers, all businesses would be brought under the umbrella.
The regulator is also exploring new laws to cover cryptocurrency exchanges. To this end it is considering the use of a ‘sandbox’, which is a quarantined environment for financial startups, to observe new companies in action and assess their legality.
Ashley Alder, CEO of the SFC, said: “The measures announced today allow us to regulate the management or distribution of virtual asset funds in one way or another so that investors’ interests would be protected either at the fund management level, at the distribution level, or both. We hope to encourage the responsible use of new technologies and also provide investors with more choices and better outcomes. We have also set out a conceptual framework to explore a pathway for compliance for virtual asset trading platform operators who are willing to be supervised by us.”
Birthplace of Bitmain
Earlier this month, former SFC Chairman Carlson Tong Ka-shing told the South China Morning Post that the territory does , as the central Chinese government has. Tong Ka-shing was in October by Tim Lui Tim-leung, an accountant.
Hong Kong is the birthplace of some of the world’s biggest crypto-companies, the two most obvious examples being Binance and Bitmain, a cryptocurrency exchange and Bitcoin mining outfit respectively. They both lead the market in their fields.
The local stock exchange is set to host the IPOs of (including Bitmain) in the near future, pending approvals, and seven local banks are developing a in partnership with he Hong Kong Monetary Authority.
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