Cryptocurrency

Hong Kong’s Securities and Futures Commission is adjusting its regulatory approach with regard to cryptocurrencies. The expansion of the market of digital assets became a reason for reconsidering the rules and increasing the activity of the SFC. 
These changes would affect the way OTC cryptocurrencies’ transactions occur and how the market players are regulated. These changes in regulation as Hong Kong seek to intensify its hub in the crypto market are meant to enhance transparency and safety of these investors.&nbsp; SFC steps up its regulation on cryptocurrencies&nbsp; 
While the SFC, Hong Kong’s financial regulating authority, is still relatively new to the regulating of the local crypto market. The changes proposed here are arrived at because of the dynamic risks and challenges typical of digital assets. This is one of the key aspects that worth mentioning – the supervision of over the counter <a href="https://news.todayq.com/singapore-bans-crypto-casino-to-combat-money-laundering/">crypto</a> transactions.&nbsp; 
Today, OTC transactions are not very well controlled, which may make it possible to manipulate a situation and perform fraudulent activities. Among the intention of the SFC is to come up with tighter measures to address the monitoring of such transactions. The commission currently developing measures to enhance the shift of the existing regulations for intermediaries related to the AML and KYC standards. Such would enhance the safety of investors involved in OTC trades thereby eliminating vices including money laundering and terrorist financing.&nbsp; 
The regulatory body is also discussing to increase the licensing criteria to regulate companies involved in the business of trading in Cryptocurrency to ensure they have the required operational and financial requirements. In so doing the SFC’s hope is that investors whether they are retail or institutional will trade in a more transparent and secure market in Hong Kong. Effect on Over the Counter (OTC) Crypto Trading&nbsp; 
OTC trading has been one of the prominent ways through which big volume transactions have been made in Hong Kong because of the opaqueness provided by the market. However, this they have left it unknown which has made regulators to have some worries. The latter submitted that such a measure is necessary to enhance the surveillance on OTC transactions because the current regulation has failed to address challenges like pre-trade transparency, trade execution, and clearing among others as elaborated in the table below.&nbsp; 
OTC brokers may be subjected to higher licensing standards which mean that they would have to implement better record-keeping as well as transaction reporting. Thirdly, the SFC wants to also guarantee the brokers’ responsibility for any odd occurrences during the trades. This would go along way in eliminating market manipulations and bringing transparency into the market.&nbsp; 
Users of OTC services may also end up experiencing further limitations buy/sell quantities and or reporting frequency. Even though these changes may initially bring some sort of imbalance to the market it is believed that in the longer run it is going to bring in more stability and transparency.&nbsp; Strategic Advance of Hong Kong in Global Crypto Sphere&nbsp; 
Regulatory actions of the SFC aimed at managing the <a href="https://news.todayq.com/uae-builds-crypto-hub-reputation-through-partnerships/">crypto</a> industry are also a part of the general governmental policies to develop Hong Kong as the major crypto hub in Asia. This region has for some time been identified as an international financial hub and these changes are meant to address the emerging pace in the digital asset space.&nbsp; 
A popular approach that has been adopted in the Hong Kong regulatory system is a middle-ground approach which seeks to satisfy both the investors and the major players in the cryptocurrencies market. The establishment of new set of guidelines on OTC trading may feed into Hong Kong image of a safe and well regulated market for digital asset trading.&nbsp; 
In addition, these regulatory changes could also be used as a model by other regions wishing to regulate the crypto market. By being more proactive, Hong Kong is effectively letting the world’s financial industry know that it is keen on sustaining its dominance in fintech and crypto.

New Hong Kong Crypto Scheme Could See Regulatory Changes

Todayq News

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