Hong Kong differs significantly in its approach to cryptocurrency and exchanges, from China. The Securities and Futures Commission (SFC) proved this by proposing a regulatory regime dubbed as a “sandbox” for crypto exchanges in the Asian financial hub. Chief Executive, Ashley Alder announced this on November 1.
According to Alder, the market for virtual assets is still quite young and trading rules may not be fair and transparent. The SFC’s latest proposals pertain to fund managers who invest more than 10 percent of their holdings in virtual currencies, with entities serving exclusively professional traders who are inclined to join a sandbox scheme that’s designed to give more room to develop new services and products. For other traders, a licensing process will be in place, wherein entities will need to inform the SFC about their business practice.
Virtual currency and cryptocurrency exchanges have been one of the hottest topics of international debates. Different governments across the world are adopting different approaches towards the same. While China has been very hostile towards cryptocurrencies, Japan, Russia and Australia have shown a lenient approach towards the industry. The Hong Kong government has taken the best stand perhaps by introducing a crash course on ICOs and cryptocurrencies.
Hong Kong became the hottest destination for many crypto exchanges to set up their offices in, as well as for miners after China declared its hostile policies and began a crackdown on miners and exchanges, as reported on CryptoGround. The Hong Kong government took the initiative to start a crash course program, as they realized the fact that it is hard to ban cryptocurrencies. Hence they thought the best bet is to educate the investors and make them well informed to be able to take well-educated decisions.
Alder stated that those cryptocurrency exchanges that wish to be regulated by the SFC will be set apart from those that don’t. He further added that in the “sandbox” stage no formal regulatory approval will be given to any exchange. Alder said that this is an opt-in approach for platform operators and exchanges. They will be able to first explore the conceptual framework with the SFC in a strict sandbox environment, as reported on Reuters.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]