Hong Kong’s Securities and Futures Commission is predicted to be making some modifications which can affect the cryptocurrency as a whole.
Firstly, all funds which have more than 10% of their investments in crypto-related belongings must apply for a particular SFC license. These funds will also be restricted to institutional traders. This is applicable to all cryptocurrency-associated investments, whether or not they’re securities.
Secondly, if cryptocurrency exchanges wish to be formally licensed, they should voluntarily apply for the regulatory sandbox. This testing interval will restrict them to institutional buyers; however, will assist the SFC to assemble a coverage to promotes progress and innovation. After this exploratory stage, the SFC will resolve on how to license and regulate this sector.
The SFC has been recognized to launch tips for digital property previously. In November 2018, they formed a ‘new regulatory framework’ for digital asset portfolio managers. They further updated these pointers in March of this year.
At present, there is no clear timetable; however, we are able to count on concrete adjustments someday this year.
As of now, cryptocurrency exchanges in Hong Kong can function with no license. The SFC, nonetheless, is lastly paying attention to these risks. Nevertheless, it additionally acknowledges that it doesn’t have the authorized permission to manage monetary devices that are neither securities nor futures contracts.
Subsequently, the query of what is a safety shall be of central significance in SFC’s discussions. As of now, Ethereum and Bitcoin are handled as products. Security tokens, alternatively, signify possession in the real-world property.