The Securities and Futures Commission (SFC), Hong Kong’s financial regulator announced that it will publish a new set of regulations for Bitcoin and all crypto exchanges. The watchdog made that announcement on November 6. According to reports by Reuters, the new directive was announced by Ashley Alder, the Chief Executive, at a local fintech event.
Regulatory Transparency for Exchanges in Hong Kong
According to the report, the new requirements are set to detail how crypto exchanges must approach various issues. These issues include custody, compliance issues like Anti-Money Laundering and Know Your Customer rules, among several other issues. Alder said:
“The framework will enable virtual asset trading platforms to be regulated by the SFC, a major development which builds on a way forward I outlined at the same time last year.”
Previous reports revealed that the SFC first established rules and regulations for cryptocurrency funds and exchanges in November 2018. Exactly a year later, the regulator is seen to be taking that work forward. That is the case as Alder told the conference on November 6, 2019.
Huobi May Lead as the First Licensed Crypto Exchange in Hong Kong
Private investor Dovey Wan stated that this could play out to become a big deal for the whole crypto industry. In particular, she said that Huobi could be already on its way to become the first licensed crypto exchange in Hong Kong. She wrote:
“WOW, this is BIG. Hong Kong SEC will announce detail in about an hour regarding cryptocurrency exchange application criteria.”
Since Huobi has already backdoor listed on HKex, it might prove to be a huge benefit for them making them the first legalized Chinese crypto exchange. In March 2019, the SFC also released regulatory guidelines for Security Token Offerings (STOs).
According to the agency, security tokens may soon become securities as stipulated under Hong Kong’s Securities and Futures Ordinance. Therefore, they fall under existing securities laws.