Hong Kong’s Securities and Futures Commission (SFC) is anxious to implement formal cryptocurrency regulations, the outgoing chairman Carlson Tong Ka-shing told the South China Morning Post (SCMP), a Hong Kong English-language newspaper, in an interview on Monday.
Tong, who will step down from his position this Friday, said the regulator is currently exploring ways to regulate the number of cryptocurrency trading platforms already operating in the city.
However, unlike China, the SFC is not leaning towards a total ban of digital assets in the city. Specifically, Tong said: “We do not think imposing a total ban on these platforms is necessarily the right approach, and it will not work in today’s internet world when trading can cross national boundaries.”
In the interview, the chairman did highlight that the SFC is limited in its powers, as the regulator is technically restricted to only regulate securities and that digital assets “may not qualify as securities”, adding that therefore, the regulator needed to be careful in its approach.
Cryptocurrency exchanges embrace the news from the SFC
According to the report, cryptocurrency exchanges operating in Hong Kong have embraced the news from the SFC. Angelina Kwan, the Chief Operating Officer of The Bitcoin Mercantile Exchange (BitMEX) told the SCMP that she would work closely with the SFC on the proposed regulations.
Speaking on the news, Kwan commented: “We hope the guidelines or regulations being considered will keep pace with market developments. The US has introduced regulations over cryptocurrency and there are futures products being traded by the CME Group and the CBOT. This shows that a regulatory authority can help to develop a new industry.
“We hope that sharing information about cryptocurrency markets and market developments in this space will help international regulators better understand cryptocurrency as an asset class.”
Jeremy Allaire, the CEO and founder of Circle, which has operations in Hong Kong, added: “We’ll pay very close attention when new licensing or regulatory frameworks emerge, and will proactively work with the government on those frameworks.”