Hong Kong Securities and Futures Commission (SFC) published new rules on Wednesday that would allow crypto exchanges to obtain a license from the financial authority. The new regulations did not receive a warm welcome from the crypto community.
According to the new regulations, SFC would treat crypto exchanges that offer security tokens as traditional brokers. Exchanges would also be required to file monthly reports to the commission.
The new guidelines leave crypto exchanges in a grey area.
The newly published regulations state that the SFC does not have the authority to issue or supervise that only buys or sells non-securities virtual assets and tokens. According to the updated regulations, hot wallets with live connections to the internet would not be able to hold more than 2% of an exchange’s total funds.
LETS JUST CHILL
I skimmed through detailed “cryptocurrency exchange guideline” by HK SFC which is kinda a BUMMER
It ONLY regulates “security token” 😂
highlighted part is TLRD so you can skip rest of the 54 pages pic.twitter.com/QGFH0O2azG
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 6, 2019
The SFC also issued warning to exchanges that offer futures products to Hong Kong citizens without any proper paperwork. The financial regulatory authority said that it had not licensed any person in Hong Kong to offer or trade virtual asset futures contracts.
The SFC cited anti-money laundering (AML) and KYC as chief concerns regarding crypto exchanges. The Securities and Futures Commission asked exchanges to fully identify its customers, including their financial situation, investment experience, and investment objectives.