- Hong Kong’s considers the rules for cryptocurrency exchanges and portfolio investments.
- Cryptos may be become out of reach for retail investors.
The Hong Kong’s Securities and Futures Commission considers regulating crypto exchanges and other companies that offer crypto related investment services via a dedicated sandbox or within the framework of the existing laws adapted to the digital assets.
Currently, SFC supervises only those tokens and cryptocurrencies that are classified as securities or futures contracts, while a sea of other virtual assets remains unregulated.
“The measures announced today allow us to regulate the management or distribution of virtual asset funds in one way or another so that investors’ interests would be protected either at the fund management level, at the distribution level, or both,” Ashley Alder, SFC chief executive, explained, speaking at Hong Kong FinTech Week.
Hong Kong is joining the ranks of global regulators that seek take the cryptocurrency industry under control and stop its Wild West ways.
SFC proposes to allow only professional investors to invest in virtual asset portfolios offered by crypto investment funds, and possibly extrapolate this rule to cryptocurrency exchanges.
The Hong Kong watchdog wants to apply automated trading services regulations to cryptocurrency exchanges, which means that the cryptocurrency exchanges could be included in the regulatory “sandbox.”
“The jury is still out on whether virtual assets serve a useful social function and should be considered in the same bracket as more natural financial assets. But it is clear that if we do regulate operators in the virtual asset space, we should hold them to the same standards as the rest of the financial system,” Alder added.
Meanwhile, Bitcoin is changing hands at $6,348, unchanged since the beginning of the day, while Ethereum and Ripple’s XRP follow the same consolidative pattern below the key resistance levels.
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