Hong Kong considers regulating all crypto activity starting now. It is a massive distancing of itself compared with the activity happening in mainland China, which is sought to ban the crypto activity utterly.
Hong Kong is now kinder to Crypto.
Hong Kong seeks to be a separate entity, even with the number of protests about Chinese government interference that had been taken place in the last two years. It makes sense that whatever mainland China is seeking to accomplish, Hong Kong wishes to set its sights on the opposite.
The country’s financial watchdog has stated that while the region wanted to accept all crypto-related trades and activities, several concerns came about later. The news came after the fact that a “love scam” had been found in Hong Kong.
Hong Kong is also different in that while the regulation takes precedence in the area, things will still be “loose” compared with other nations in Asia. For instance, Japan and Singapore have deemed it necessary for all the crypto exchanges and digital wallet companies to be regulated.
The Securities and Futures Commission (SFC) in Hong Kong has deemed only exchanges in the region that trade securities or tokens deemed securities shall be regulated. Therefore, a company that looks to sell a commodity like bitcoin would not subject to the same rules and laws.
The chief executive of SFC, Ashley Alder, elaborated in a recent speech:
“This is a significant limitation, as under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security.”
However, things are starting to look different; from now on, all cryptocurrency trading platforms that operate in Hong Kong or target investors in the region must apply for an SFC license. While several digital trading platforms are stationed in Hong Kong, many have decided not to apply for licenses in the present regime.
Releasing the Right Licenses
As of now, the SFC only agreed to issue a license to one crypto exchange. It is a company named OSL Digital Securities, and it is a unit of the BC Group, which is a division of Fidelity.
Bitcoin has reacted positively to the news and showed a $300 over the preceding day.
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