Cryptocurrency exchanges and investors in Hong Kong will keep an eye on the possible regulation changes in the crypto space to be initiated by the SFC.
Hong Kong’s Securities and Futures Commission (SFC) gears up to make two major changes that will modify the cryptocurrency space and defend it from crypto fraud, based on reports.
In an effort to improve Hong Kong’s cryptocurrency space, the SFC will require investors whose crypto-related asset investments comprise 10 percent of their funds to apply for the special license from the Commission. This new policy will cover all crypto-related investments and will limit such funds to institutional investors.
At the same time, Hong Kong SFC will require all cyrptocurrency exchanges to apply for the regulatory sandbox in order to operate and to be officially licensed. The SFC will use the regulatory sandbox as a means to determine the next best steps toward licensing and regulating in the cryptocurrency space.
The SFC sees this specific change as a step forward to controlling the risks involved as crypto exchanges currently can operate in Hong Kong without needing a license. Others, however, view this move as burdensome for the exchanges.
Leo Weese, President of the Bitcoin Association of Hong Kong, wrote online that the new policy will push exchanges and related companies out of China:
“While Hong Kong was a better place when it did not bother such platforms, it was inevitable this day would come. Exchanges will likely maintain parts of their teams in Hong Kong, but work harder to convince the public of a new narrative that places them outside the SAR.”
No specific dates have been announced for when these changes will apply. News of the SFC’s plans, however, was timely as the Hong Kong’s cryptocurrency exchange CoinBene faces a controversy.
We received numerous inquiries regarding our alleged hiring in Germany
But CoinBene is not planning to open any office nor hiring any representative in Germany. Nonetheless, we would like to thank those who actively reached out to us for your concern and understanding pic.twitter.com/1Jxid6sit2
— CoinBene Global (@CoinBene) May 25, 2019
CoinBene, which is registered in Hong Kong, earlier denied being hacked and has recently refuted Germany’s BanFin’s claims that the exchange is recruiting German residents to trade for CoinBene users.
The cryptocurrency exchange said news of it setting up an office in Germany and hiring freelancers are not true.