Hong Kong’s Securities and Futures Commission (SFC) is looking at ways to regulate the city’s cryptocurrency trading platforms in order to tighten investor protection.
The SFC’s outgoing Chairman Carlson Tong Ka-shing told the South China Morning Post that imposing a total ban would not necessarily be the right approach because transactions can still be conducted via platforms in overseas markets.
The SFC has previously told cryptocurrency exchange operators they must abide by current regulations, but Tong says the watchdog is keen to get more formal cryptocurrency laws in place.
Tong states that no other international market currently has a comprehensive regulation framework for cryptocurrency platforms, adding: “We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors’ interests are being protected.”
Cryptocurrency exchange operators have welcomed the move, with Angelina Kwan, Chief Operating Officer of The Bitcoin Mercantile Exchange (BitMEX), saying she would work closely with the SFC on the proposed regulations.
“We hope the guidelines or regulations being considered will keep pace with market developments,” she told the SCMP. “The US has introduced regulations over cryptocurrency and there are futures products being traded by the CME Group and the CBOT. This shows that a regulatory authority can help to develop a new industry.”
Jeremy Allaire, Founder and Chief Executive of US-based cryptocurrency unicorn Circle, says: “We’ll pay very close attention when new licensing or regulatory frameworks emerge, and will proactively work with the government on those frameworks.”