Hong Kong’s Securities and Futures Commission (SFC) has said that it will regulate all cryptocurrency trading platforms operating in the region, media reports said. The SFC launched a regulatory framework specifically for cryptocurrency trading platforms last year.
The recent developments come in a time when regulators across the globe are still assessing whether to regulate cryptocurrencies or not, in order to protect investors and prevent fraudulent financial activities.
Ashley Alder, chief executive of the SFC told the media, “This is a significant limitation, as under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security.”
Alder also revealed that Hong Kong is working on a new licensing regime under its anti-money laundering legislation. This means all cryptocurrency trading platforms that operate in the financial hub will require a licence.
There are many cryptocurrencies trading platforms already operating in Hong Kong; however, they are not bound to apply for a licence under the current regime.
Earlier this year, Hong Kong has approved the launch of its first crypto exchange. The Securities and Futures Commission (SFC) gave its approval to OSL Digital Securities to begin offering cryptocurrency services in the region.
According to reports, OSL, which is backed by US-based investment giant Fidelity, applied for a licence last year when Hong Kong amended its rules and regulations to allow crypto exchanges to operate in the country.
In a statement, OSL said that the move could see OSL become the world’s only publicly listed, licensed, insured and Big-4 audited digital asset platform.