The Securities and Futures Commission (SFC), the regulatory watchdog of Hong Kong that regulates futures and securities in the country, is looking forward to regulating all of the cryptocurrency trading exchanges that operate in the country. As reported by Reuters, the regulatory body will be expanding its regulatory oversight on cryptocurrency trading firms without taking into account the fact whether they are providing access to digital securities or offering trading services of crypto assets such as Bitcoin (BTC).
SFC is set to transform rules for digital currency trading platforms in accordance with the guidance of the Financial Action Task Force (FATF). Cryptocurrency trading platforms will now be required to apply for the Securities and Futures Commission license, said Clara Chiu, the Director of Licensing at SFC while speaking at Hong Kong Fin-tech Week 2020 on Tuesday.
She further added that if there are found any serious breaches like market manipulation on these trading platforms a restriction will be imposed on their businesses.
In addition to this, Chiu claimed that under the proposed regime, digital currency platforms will be permitted to provide trading services to only professional traders and investors. She also put an emphasis on maintaining the protection of these investors that the platforms need to ensure.
Ashley Alder, the Securities and Futures Commission’s Chief Executive Officer (CEO) also shared his view regarding this in a speech on Tuesday. He said:
“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.”
Alder also said that a new licensing regime will be proposed by the Hong Kong government under its legislation of Anti-Money Laundering (AML) for all cryptocurrency trading platforms. Once the new regime is introduced, all of the crypto firms operating in the country “would be regulated, supervised and monitored under one of two regimes: the existing opt-in framework we introduced last year, or the proposed new licensing approach”.
