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Hong Kong financial authority publishes new crypto exchange regulations

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Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

Hong Kong Securities and Futures Commission (SFC) published new rules regarding crypto exchanges yesterday. Crypto exchanges in the country would be required to follow all these laws in order to receive an operating license. According to the new regulations, regulated crypto exchanges can only offer products to “professional investors” as defined by the SFC.

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.

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.

Disclaimer: Coinnounce's views are not necessarily reflected in the articles published, and they are the sole representation of the author's opinions. Article's information should not be taken as investment advice. Risks are involved in cryptocurrency investments and trading. Readers are urged to carry out extensive research before making a decision.

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