In a bid to tighten investor protection, Hong Kong financial regulator, Securities and Futures Commission (SFC) is looking to introduce new measures that will closely monitor cryptocurrency trading platforms and offer maximum protection to investors.
Banning Cryptocurrency Trading is Not Possible
Apart from cryptocurrency mining, investors make money by trading their digital assets for other similar assets or fiat currency. During a recent interview, Securities and Futures Commission outgoing Chairman, Ka-shing told the media that banning cryptocurrency trading completely is not possible. He also went ahead to state such as move would not be successful based on the current digital and internet world where trading is done virtually and national boundaries cannot stop the transactions.
Unlike Mainland China regulator who opted to ban digital currency trading completely, Hong Kong SFC has decided to just issue a warning to the exchange platforms and caution investors about the risks associated with cryptocurrencies.
As the cryptocurrency market advances, in both institutional and retail trading frames, SFC and other financial regulators will face increased pressure to come up with formal rules and regulations to control trading. The outgoing chairperson also retaliated that the financial institutions need to be careful when evaluating various regulatory approaches for cryptocurrency exchanges because they operate on new technology and they may not qualify to be categorized as securities. Concisely, the exchanges do not fit in the valuation requirements, audit, or custodian.
At the time of writing this article, Securities and Futures Commission team is busy evaluating the various ways of regulating cryptocurrency trading platforms. The goal of the regulator is to regulate the platform at a standard level that is comparable or similar to the conventional licensed trading platforms. As it develops the regulations, SFC needs to make sure that the cryptocurrency investors are protected at all times.
Verified sources that are conversant with the discussions taking place in the boardroom has revealed that the SFC team is hoping that the regulations and guidelines will be in line with the current market trends and developments. Already, the United States has already introduced a number of regulations meant to monitor cryptocurrency trading. It is also important to note that there are futures products that are already being traded by CBOT and CME group.
Views of Industry Leaders about Cryptocurrency Trading Regulations
Bitcoin Mercantile Exchange (BitMEX) Chief operating officer Angelina Kwan is optimistic about the regulations and is of the idea that the regulatory authority could help to establish a new industry that will be safer for both investors and the trading companies.
On the other hand, the founder and current chief executive offer of Circle, Jeremy Allaire wants the regulations that will be put in place to safeguard the real risks of cryptocurrency investors. Jeremy also wants the regulations to guarantee long term potential of the ballooning digital asset industry.
As a result of the harsh approach taken by Mainland China to ban all activities related to cryptocurrency trading, Alipay was left with no option but to halt all Bitcoin over-the-counter trades.
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