Hong Kong Regulators Set to Tighten Cryptocurrency Laws

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Asia is currently one of the most regulated continents on the
planet in terms of cryptocurrency laws. Hong Kong is the latest
Asian nation that is set to tighten crypto laws on traders and
exchanges.

The Hong Kong Securities and Exchanges Commission (SFC) is
looking to tighten the current cryptocurrency laws as concerns
over crypto-crime and money laundering heighten across
Southeast Asia.

Tightening Less-StringentCryptocurrency Laws
Hong Kong’s current stance on cryptocurrency is one of the least
stringent in the region, which is a stark contrast to the more
hardline approach taken by mainland China. As Hong Kong is one
of the world’s leading financial epicenters, the SFC is set to
reevaluate cryptocurrency laws, especially in terms of regulating
the Initial Coin Offering (ICO) sector.

Crypto-related commercial activities in China are pretty much
banned, so some people might think that this move is long
overdue. According to the SFC, if an investment fund has 10% or
more of digital assets they will now need to obtain a license. And
even then the companies will only be able to sell their products to
professional investors.

The SFC want to set up a voluntary scheme where exchanges will
be able to test their digital assets in what is being deemed a
“temporary regulatory sandbox” and will then be able to decide
whether they need to seek a license.

Writing is on the Wall fo Hong Kong
The Hong Kong SFC have been warning the industry for many
months about their plans to impose tighter cryptocurrency laws.
Earlier this year in February, the SFC warned seven cryptocurrency
exchanges in the wake of complaints made by investors.
It is hardly surprising that Hong Kong is looking to tighten
cryptocurrency laws as many major economies across the world
are currently reevaluating their stance on crypto regulations.
There are many pros and cons in tighter regulatory measures on
the Hong Kong crypto industry. Although many consider it
essential to safeguard investors and keep a lid on the industry,
others believe that the new cryptocurrency laws could be costly
and work against crypto firms in Hong Kong.

Daiwa Institute of Research professional Daisuke Yasaku believes
it might be a bad thing for Hong Kong when saying:
“The cost of regulations will be high. The requirements of
the SFC initiative may prove too burdensome for some
operators.”
The price of wider crypto adoption will always be high, but that is
the price we pay sometimes to ensure the industry and investors
are protected. Will the tightening of cryptocurrency laws in Hong
Kong be a good or bad thing for the local industry? Only time will
tell.

Source: https://www.ccn.com/