SFC of Hong Kong Announces Plan to Revamp Cryptocurrency Laws

The Securities and Futures Commission of Hong Kong has announced its intention to pass laws covering Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term businesses, including cryptocurrency platforms.

"We hope to encourage the responsible use of new technologies"

Currently, only tokens which meet the definitions of security/futures contracts are supervised by the SFC. This has left a big hole for certain businesses to slip through and operate without supervision. By defining all those that distribute funds in Hong Kong as portfolio managers, all businesses would be brought under the umbrella.

The regulator is also exploring new laws to cover cryptocurrency exchanges. To this end it is considering the use of a 'sandbox', which is a quarantined environment for financial startups, to observe new companies in action and assess their legality.

Ashley Alder, CEO of the SFC, said: "The measures announced today allow us to regulate the management or distribution of virtual asset funds in one way or another so that investors’ interests would be protected either at the fund management level, at the distribution level, or both. We hope to encourage the responsible use of new technologies and also provide investors with more choices and better outcomes. We have also set out a conceptual framework to explore a pathway for compliance for virtual asset Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term operators who are willing to be supervised by us."

Birthplace of Bitmain

Earlier this month, former SFC Chairman Carlson Tong Ka-shing told the South China Morning Post that the territory does not intend to ban cryptocurrency, as the central Chinese government has. Tong Ka-shing was replaced in October by Tim Lui Tim-leung, an accountant.

Hong Kong is the birthplace of some of the world's biggest crypto-companies, the two most obvious examples being Binance and Bitmain, a cryptocurrency exchange and Bitcoin mining outfit respectively. They both lead the market in their fields.

The local stock exchange is set to host the IPOs of three Chinese Bitcoin mining companies (including Bitmain) in the near future, pending approvals, and seven local banks are developing a private blockchain in partnership with the Hong Kong Monetary Authority.