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Hong Kong introduces new regulations for cryptocurrency funds and exchanges

A statement, issued by the Hong Kong securities watch dog, unveils new rules for cryptocurrency funds and possible regulations for digital-asset exchanges. This joins the global shift in acceptance of the industry.

The securities and futures commission of Hong Kong issued a statement on the 1st of November which details the regulatory framework that is to be set up for cryptocurrency funds and exchanges. Chief of the commission, Ashley Alder, has hinted that this will help in the culmination of a formal regulatory environment for the crypto industry.

The statement claims that fund managers who invest more than 10% of their portfolio into crypto assets will now need to be officially licensed. Trading platforms that serve only professional investors can opt to move into a so-called sandbox, designed to give them more room to develop new products and services.

There has long been an expectation that local authorities would craft a formal framework for the crypto industry. China is notorious for harboring some of the greatest amounts of scam cryptocurrency projects in the world. However, the way the cryptocurrency market is handled in Hong Kong differs significantly from the rest of China. There, crypto asset exchange and related activities are largely legal, although formal regulation is still in the works.

Hence, the Cryptocurrency exchanges and funds in Hong Kong will be monitored to see how well they can handle complying with the new regulatory framework put into place.

Hong Kong’s introduction of a stronger regulatory framework comes during a global push for improved supervision of the crypto field.  Many countries and institutions are implementing their own rules and regulations regarding cryptocurrency.

Last week, Taiwan announced it would release dedicated rules regarding how Initial Coin Offerings (ICOs) would be governed by June next year. This, after they previously chose not to regulate the sector.

In early October, Vanuatu enlisted the aid of Malta to help form blockchain and ICO regulations. Malta itself is a pioneer in the implementation of blockchain and cryptocurrency into its economy.

With Hong Kong joining this trend, it looks like cryptocurrency will become further integrated into our everyday lives.