Cryptocurrency falls into a legislative gray area in many jurisdictions, which is why governments should take a particularly nuanced approach to developing regulatory frameworks for crypto trading, the outgoing chairman of Hong Kong’s securities regulator said in a recent interview.
Key Challenge for Legislators
“We have to carefully consider the regulatory approach for these platforms because they are new technology and may not qualify as securities,” Carlson Tong Ka-Shing, the current chairman of the Hong Kong Securities and Futures Commission (SFC), told the South China Morning Post.
Tong, who will hand over the reins to incoming SFC Chairman Tim Lui Tim-Leung on Oct. 19, said cryptocurrencies pose a significant challenge to legislators.
“They do not fit in the custodian, audit or valuation requirements, for instance, normally expected under the Securities and Futures Ordinance,” he said. “No other international market currently has a comprehensive regulation (sic) framework for these cryptocurrency platforms.”
Trading Bans Are Not a Practical Solution
Tong rejected the notion of prohibiting cryptocurrency trading platforms as a viable regulatory strategy. Such moves would prove fruitless in the current world, where trading can be freely conducted without concern for national borders, he argued.
“We do not think imposing a total ban on these platforms is necessarily the right approach,” he said, noting the importance of protecting the interests of investors. “Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets … We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue.”
Bitmex COO Looks to U.S. Crypto Rules
Angela Kwan, the recently hired chief operating officer of Hong Kong-based cryptocurrency derivatives trading platform Bitmex, said the SFC should follow the lead of the U.S. and other leading markets with regard to international crypto regulations.
“We hope the guidelines or regulations being considered will keep pace with market developments,” Kwan said.
She claimed that the futures products that are now being traded in the U.S., for example, illustrate how regulators can help to support the growth of the crypto industry. “We hope that sharing information about cryptocurrency markets and market developments in this space will help international regulators better understand cryptocurrency as an asset class,” Kwan concluded.
What is your response to the outgoing SFC chairman’s comments regarding the regulation of cryptocurrency trading platforms? Share your thoughts in the comments section below.
Images courtesy of Shutterstock, ugc.edu.hk
At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.
The post Hong Kong Regulator: Cryptocurrencies ‘May Not Qualify as Securities’ appeared first on Bitcoin News.
from Bitcoin News https://ift.tt/2OtGga8 Hong Kong Regulator: Cryptocurrencies ‘May Not Qualify as Securities’