HK tests new opt-in approach for crypto exchanges

Author: Karry Lai | Published: 8 Nov 2018

Hong Kong’s Securities and Futures Commission's (SFC) decision to impose licensing conditions on firms that manage portfolios investing in virtual assets is a signal it is clamping down on excesses in the sector. The new rules apply irrespective of whether the underlying assets meet the definition of a security or a futures contract. 

A new sandbox approach is also being tested on those virtual assets exchanges and platform operators that agree to it as the regulator explores potential future regulation in the sector.

SFC chief executive Ashley Alder highlighted the voluntary approach, and said the measures allow the regulation of virtual asset funds so that investor interests are protected either at the fund management level, the distribution level, or both.

According to Wayne Trench, chief executive of digital asset brokerage OSL, the new proposed regulatory regime serves as another vote of confidence in terms of legitimacy for the...