Crypto players who moved to Hong Kong after mainland China banned cryptocurrencies have to brace themselves for the new rules and regulations coming their way. This is after plans have been set in motion for the Securities and Future Commission to introduce new guidelines to tighten the rules currently in place for the crypto sector in Hong Kong.
Due to the wave of fraudulent and money laundering activities,SFC has been forced to strengthen laws in place. But will implement the new guidelines in stages. For those wishing to launch their tokens in Hong Kong, they now have to get a license from SFC first. However, before all that founders can test their platforms in the regulatory sandbox in place.
The aim of the Regulatory Sandbox
Before going live on your ICO, SFC is giving the founder space to not only test run their projects but also the services and products that come with the platform. Through the sandbox persons behind the ICO can verify their products and services will withstand the market before proceeding together a license from SFC.
Dive through SFC New Guidelines
First and foremost if 10% of your assets are in any digital currency such as bitcoin and you are looking to launch an investment fund in Hong Kong, you must get a license from SFC. Furthermore, you will only be required to sell your products to only professional investors. Moreover to get your tokens on any exchange token issuers must comply with requirements set by SFC agency. One condition is the tokens been floated should have been in existence for at least one year.
As SFC continues to put in place a conducive legal framework the rules are a doubled edged sword. As reported on Asia Nikkei local news outlet Timothy Loh says,
“Some players in Hong Kong might not comply with the new guidelines for fear of losing the current market value of their shares.” Loh is a manager of a law firm in Hong Kong.
SFC is Clamping Down on Rogue Players in the Sector
While acting under its mandate, the agency sent letters to seven local exchanges warning them after receiving complaints from the publican February. Apart from sending warning letters in February the followingmonth, SFC stopped operations at Black Cell Technology.
Although the legal framework might cause issues to industry players, in the long run, it will streamline the industry in Hong Kong.