Hong Kong is ready to impose strict bitcoin laws in the country which previously has been a great market for initial coin offerings and other crypto related businesses, unlike the mainland China which had imposed a strict ban on all bitcoin and crypto related activities in the country. The Securities and Futures Commission of Hong Kong plans to put cryptocurrency exchanges, crypto traders and other crypto related companies under its sight.
Guidelines by SFC
The following has been planned by the Securities and Futures Commission because of the growing crypto related frauds and money laundering activities in the country. According to the commission’s guidelines, all investment fund should acquire licensing from the SFC if more than 10 percent of their assets are in bitcoin or any other cryptocurrencies and the investment funds will be permitted to sell these products only to the institutional investors.
The planned regulation will come into the picture step by step. The companies that are willing to have an initial coin offering should fulfill the requirements of the commission which includes that their coins or tokens should be at least a year old.
Steps taken by the SFC previously
Earlier this year, the Securities and Futures Commission had issued warning letters against 7 bitcoin exchanges in the country after investors filed complaints about not being able to withdraw their funds from these exchanges. Some of the exchanges were also indicted for manipulating the cryptocurrency markets.
Also, SFC had instructed Black Cell Technology to stop its initial coin offering on an immediate basis and the company was accused of running unapproved promotions of its ICO.
The consequences of regulation
The strict regulations by the Hong Kong authorities will surely affect the cryptocurrency space as Hong Kong which is one of the leading economies in the world is fighting against money laundering activities in the crypto industry. Bitcoin and other cryptocurrency exchanges in the country will be subject to reporting to the SFC on a regular basis and will need to go through strict observations and examinations which shall prove to be quite a burden for some of the businesses and hence they may not be willing to abide the new regulatory framework. The framework will also increase the working cost of the exchange hence forcing them to increase the trading fee. The increased trading fee would discourage new investors to enter into the markets. On the other hand, some experts are predicting that a strict regulatory framework would eventually lead to an increased confidence within the investors.
What do you think about the proposed regulations by the Securities and Futures Commission of Hong Kong? How will it affect the price and adoption of bitcoin in the long run? Tell us in the comments section below.
