On the week of the 12th anniversary of Bitcoin Pizza Day the cryptocurrency continues to grow, despite negative (and often unwarranted) press and setbacks due to (also often unwarranted) association with bad actors. Whilst some countries remain adverse to the idea of trading cryptocurrencies, the special administrative region of Hong Kong has come down on the other side, with news revealed this week of its decision to allow retail trading in crypto, which could be Hong Kong’s next step in becoming a hub for digital assets.
Published in ‘Consultation Conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the Securities and Futures Commission’, this news shows that crypto’s woes in the US where continued court cases against various exchanges cast doubt on its acceptance in America are not the same elsewhere. In contrast to China’s adversity to crypto trading, Hong Kong’s Securities and Futures Commission (SFC) has confirmed that, from the 1st of June, retail investors would be allowed to trade in specific virtual assets on licensed trading platforms.
Regulation was fundamental in this decision, which was highlighted by the comments of SFC Chief Executive Officer, Julia Leung: “Providing clear regulatory expectations is the key to fostering responsible development. Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”
With this focus on protecting users, the document noted the importance of having safe custody of assets, segregating client assets, avoiding conflicts of interest, strong cybersecurity standards, and the requirements expected of licensed trading platforms. Despite this development, the announcement from the SFC noted that ‘[The SFC] has yet to approve any virtual asset trading platform to provide services to retail investors and most virtual asset trading platforms currently accessible by the public are not regulated by the SFC.’ and that in order to comply the businesses would have to apply for a license.
Although this isn’t unexpected (the consultation paper having gone out in February) this move shows the increasing trend of governments moving towards allowing crypto and blockchain solutions providing certain regulatory measures are met, which has also been seen this month in Nigeria and Kenya. This is part of the same mission that Blockpass has been working towards and supporting for a number of years and the compliance solutions offered by Blockpass makes meeting regulatory requirements simple.
Blockpass continuously updates its solutions and processes and monitors and adapts to regulatory changes around the world. In doing so Blockpass ensures businesses and customers alike are safe, secure and prepared for the ever-evolving regulatory landscape. Companies in Hong Kong and around the world which need to meet compliance requirements can find a solution in Blockpass.
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By Matthew Warner