Hong Kong will require cryptocurrency trading platforms to operate under special licences from the Securities and Futures Commission (SFC).
The indiscretion has been reported by Reuters and marks a step change for the Chinese city. In fact, while the approach used to be softer, the SFC has now decided to include a compulsory licence in the anti-money laundering regulations. This will make it mandatory for crypto trading platforms to turn to the SFC to trade.
Only a year ago Hong Kong issued a regulatory framework that was intended for those trading with security tokens. But, as Ashley Alder, head of the SFC, explained, this meant that those who wanted to operate outside the rules simply tried to prove that they were not operating with securities such as security.
In short, the crypto regulations in Hong Kong are becoming more stringent, just like in the rest of China. These statements would already have had consequences.
Hong Kong and cryptocurrency licensing: reactions
Some users have linked this news to the significant movement of Bitcoin reported by Whale Alert all coming from the Huobi exchange to unknown wallets. Huobi has some locations in Hong Kong.
For others, it is clear that China will soon apply a new tightening on cryptocurrency as it prepares to launch its digital state currency.
The Bitcoin Association in Hong Kong has expressed serious doubts. The new regulation, they say, will not only serve to license cryptocurrency trading platforms, but will do more than that:
„Even authorized exchanges will not be able to sell Bitcoin to ‚uncredited investors'“.
It is also noted that the same law would allow the exchange of gold, security and futures to continue. And for this they ask:
„How can any law restricting Bitcoin trading on the dollar allow such provisions?“
Currently the same association advises to buy Bitcoin from exchanges while knowing that there are fees. This is because banks are reluctant to offer cryptocurrency services.
Alternatively, platforms such as Localbitcoins and Paxful or ATMs can be used.
In Hong Kong at the moment there are the following exchanges:
Those abroad that are most operational in Hong Kong are reported:
You can bet they will soon have a hard time in the candidate city to host the launch of the Chinese digital currency.