Hong Kong’s Securities and Futures Commission declares that all crypto platforms with operations the city be regulated
Speaking during the FinTech Week event today, Ashley Alder, the CEO of the Hong Kong securities watchdog, announced that the new regulation would apply to all crypto trading platforms. This includes the crypto exchanges that don’t trade securities.
Prior to this, the SFC employed an ‘opt-in’ regulatory approach for crypto exchanges that meant the platforms could voluntarily choose to be part of a regulatory framework if they had operations in the city. The platforms also needed to be trading more than one security.
A section of SFC’s previous announcement read, “Platforms which operate in Hong Kong and offer trading of at least one security token (Note 2) may now apply to be licensed by the SFC.”
According to Alder, the approach allowed some exchanges to operate without any regulations. He added that the commission would also propose an updated licensing scheme under the AML ordinance.
“Once this new regime is in place, all virtual asset trading platforms in Hong Kong would be regulated, supervised and monitored under one of two regimes: the existing opt-in framework we introduced last year, or the proposed new licensing approach being announced today. Failure to do so would, of course, be an offence.”
There are many crypto exchanges with operations in Hong Kong, including Huobi, OKEx and BitMex. All three exchanges have been in the headlines recently for the wrong reasons. The co-founders of BitMex are currently facing charges in the US.
OKEx’s founder Mingxing Xu was arrested just over two weeks ago, and his arrest paralysed the exchange’s operations. It is reported that in excess of 200,000 BTC has been caught in limbo as a result of the arrest.
There are rumours that the senior executives of Huobi have also been arrested. The crypto exchange was founded in China but has since moved its base to Singapore. Huobi denied the rumours in a response vian Twitter saying, “Huobi Global is operating normally. We have become aware of rumours within our community about the arrest of a Huobi senior executive by local officials. We can share with confidence that these rumours are false.”