Hong Kong’s securities regulator wants more stringent regulations for the digital currency trading sector. The city has been weighing a raft of regulations that seek to limit exposure to retail clients, but the deputy head of the securities regulator believes Hong Kong should do more. Liang Fengyi, deputy chief executive of the Securities and Futures Commission (SFC), recently said that the agency needs to tackle digital currency fraud.
The commission has been making moves to protect investors from crypto scams.
The SFC has a duty to expand the scope of its regulations to better encompass the nascent industry, she stated. The commission has been making moves to better protect investors from digital currency scammers, including through consistent warnings to the public on the risks of digital currency investment. However, in Hong Kong, there still lacks definitive regulations for the crypto sector. For one, cryptocurrencies are not legally defined as securities or payment methods, Liang noted, according to a report by local paper ETNet. This means that they fall out of the jurisdiction of the SFC, making it that much harder for the commission to provide oversight for the industry.
SFC to conduct investor education to prevent losses from trading.
Liang further believes it’s critical for the SFC to conduct investor education to prevent them from incurring huge losses while trading. In addition, the regulator must crackdown on unlicensed digital currency transactions. The agency “is continuously strengthening the supervision of over-the-counter derivatives and will also launch a transaction data repository in the future,” she added. The SFC’s measures have protected investors from using crypto trading platforms that have yet to receive an operating license in the special administrative region. A month ago, Binance announced that it was shutting down derivatives trading in Hong Kong.