Hong Kong’s SEC Aims To Regulate Local Crypto Exchanges

Hong Kong’s SEC aims to regulate local crypto exchanges according to a new report that we have in our latest cryptocurrency news.

Cryptocurrency trading platforms in Hong Kong will soon be subject to full legal scrutiny as the nation’s financial watchdog Hong Kong’s SEC aims to regulate them by releasing a new regulatory framework. The Hong Kong Securities and Futures Commission announced that it plans to regulate all exchanges in the country according to a Reuters report. Hong Kong struggled in the past with the unclear rules for crypto exchanges. They had an attempt in 2018 which failed, as the country published an opt-in framework for crypto platforms that offer trading services in the region in 2019.

Only a few trading platforms applied for the license after the framework was published in 2019. The exchanges that applied are yet to get a full license from the SEC regulator which agreed to issue a license to crypto exchange OSL which is the first company to apply for the license. It was believed that the framework which was reductant since it didn’t apply to the majority of the exchange which operates in the region, and it didn’t provide clarity for local companies.

There’s a growing concern that some exchanges are still operating completely off the regulatory radar. Since the regulation doesn’t provide more clarity, most exchanges leverage the existing regime’s limitations by focusing on crypto-assets like Bitcoin and ETH instead of regulated security tokens. The watchdog now plans to propose a new framework with clear rules for exchanges as the new regulation will require all crypto trading platforms in the country as foreign exchanges as well, that target Hong Kong investors, to apply for an SFC license whether they deal with security tokens or not.

In recent times, countries across the world are adopting clearer policies for cryptocurrencies and exchanges. For example, Ireland announced that it plans to police crypto exchanges and wallet providers as a part of the efforts to curb money laundering. The UK Financial Conduct authority also explores further crypto regulations that could require crypto businesses to file a report on how they deal with financial threats.