HONG KONG TIGHTENS RULES FOR THE CRYPTO INDUSTRY
The Hong Kong Securities and Exchange Commission (SFC) intends to strengthen control over the circulation of cryptocurrencies due to the risks of increased crime and money laundering. SEC announced a new package of measures for the legal regulation of the blockchain industry. So, local investment funds, investing from 10% of capital in crypto assets, will now be required to obtain a special license, but even after that they will be able to trade only with institutional investors.
Unlike mainland China, Hong Kong now has one of Asia’s softest legal frameworks for the crypto industry. However, the Hong Kong authorities decided to reconsider their loyal policy, especially with regard to the ICO.
One of the innovations will affect the sphere of investment. Under the new rules, the Fund, which owns 10% or more cryptocurrency assets as part of the investment portfolio, is now required to obtain a special license. However, it will only allow trading with institutional investors.
Another planned event is the opening of a” Temporary Regulatory Sandbox”, where new blockchain companies will be able to test their digital products for compliance with local legislation.
The government of Hong Kong spoke about plans to introduce new laws on cryptocurrencies, back in October. The latest legislative innovations are a continuation of the strategy of strengthening control over cryptocurrency exchanges and investment companies.
It is noted that the new restrictions for investment funds can hit the local blockchain industry, as cryptocurrency trading is a very common phenomenon among Hong Kong residents.