HONG KONG adopts new rules for the regulation of cryptocurrency funds and exchanges

The Hong Kong Securities Regulator issued a statement setting out guidelines for cryptocurrencies on Thursday, November 1, saying it could move on to formal exchange regulation. As he called "guidelines on regulatory standards" the Securities and Futures Commission (SFC) in China's autonomous territory has set in motion a series of steps that will culminate in formal regulation. Hong Kong differs significantly in the cryptocurrency approach to mainland China.

"The virtual asset market is still very new and trading rules can not be transparent and fair" Bloomberg notes. The most recent proposals refer to potential fund managers investing more than 10% of their share in cryptocurrencies, entities serving exclusively professional traders who are able to join a scheme designed to provide more space for the development of new products and services. For others, a licensing process will require entities to inform SFC about their business practices.

The statement writes that: "In order to allow for better investor protection, the SFC believes that all licensed portfolio managers intending to invest in virtual assets should essentially observe the same regulatory requirements, even if portfolios (or portions of portfolios) or partly in virtual assets, regardless of whether these virtual assets qualify as securities or futures".

Also, exchanges of crypto currencies could be under the direct supervision of the SFC more directly in the future. "It is proposed that the behavioral rules for virtual asset trading platform operators be comparable to those applicable to existing automated trading services providers," the institution adds.

Improving Hong Kong's regulatory oversight comes as more and more jurisdictions are moving to do the same, as Bitcoin markets stabilize and a general acceptance of their longevity begins to crystallize. Last week, Taiwan announced it will launch, by June next year, specific rules regulating initial currency bids (ICO), previously choosing not to regulate this sector. So, all these news just put us on the right path for mass adoption and risk management for long term investments. The future looks bright for the early crypto adopters as well.