Hong Kong has expressed the need to protect investors by regulating the virtual currency trading platforms. South China Morning Post quoted the island’s Securities and Futures Commission’s (SFC) outgoing Chairman Carlson Tong Ka-shing saying these words on Monday. Surprising, local Crypto firms supported Ka-shing’s words and expressed their willingness to collaborate.
Hong Kong Prefers Crypto Regulation Over Total Ban
South China Morning Post has reported that Hong Kong’s Securities and Futures Commission (SFC) is considering regulating the Crypto sector in the islands. Outgoing SFC Chairman Carlson Tong Ka-shing has stressed the need for the regulator to protect investors. Although blockchain technology and Cryptocurrencies can be used to improve various processes and systems, they could also be used in illegal activities such as fraud and money laundering.
Unlike China that chose to ban Cryptocurrencies, Tong said that regulating the sector is the best approach. He added that given that internet has made it easy for cross bounder trade, it is not prudent to ban the virtual currencies. Furthermore, even with a ban, he noted that the internet would allow people to access platforms in other countries.
Tong is expected to hand over SFC leadership to Tim Lui Tim-leung this coming Friday. Tong stressed the importance of having a legal framework to manage Cryptocurrencies activities on the island. He added that Cryptocurrencies should be regulated like the other licensed trading platforms. Importantly, he said there is a need to protect the interests of investors while at the same time allowing innovation.
Crypto Firms Support Regulation
In a surprising move, Hong Kong-based Crypto firms expressed their support for regulations. The news outlet overheard BitMEX’s COO Angelina Kwan expressing their interest to work with SFC in creating a legal framework for the sector. She added that the companies are ready to keep pace with any changes. BitMEX is one of the largest Cryptocurrency exchanges by trading volume.
Jeremy Allaire, Circle’s CEO also said that they are in support of regulations. He added that once the regulations come into place, they will closely work with the government. He added that although Cryptocurrencies have various benefits, there is a real risk on the part of investors and there is a need to ensure they are protected.
Hong Kong Crypto Market
Since the banning of Cryptocurrencies and related activities in mainland China, Hong Kong has emerged as the preferred destination for most Crypto firms in the region and beyond. Businesses previously involved in Crypto-related activities in Shanghai have found a new haven on the island, moving their offices and operations there. Various renowned Cryptocurrency firms are now operating from the country.
Hong Kong is determined to introduce the necessary regulations that will not hurt the development and use and development of Cryptocurrencies. The island is also planning to become a Crypto hub and compete with other countries in Asia such as South Korea and Thailand. Crypto companies are creating job opportunities, especially in the information technology sector. They are also becoming a source of income to the government by paying taxes. Governments around the world are having a difficult time regulating the Crypto sector given the newness of the technology.