Hong Kong Changes Law to Regulate Cryptocurrency Exchanges
The Securities and Futures Commission (SFC) of Hong Kong will be mandated to regulate all cryptocurrencies in the territory and follows an amendment of the law that requires all ramps to apply for a license. A November 2019 circular showed that it was optional for exchanges to opt-in but not there have been changes and exchanges must apply as required under their anti-money laundering legislation.
Cryptocurrencies are most unclassified and there is a thin line between investing in securities and utilities. Besides, cryptocurrency ramps are often blamed as agents of money laundering. The United States government has been active, slapping heavy fines and penalties to exchanges, individuals, and projects deemed to be offering securities or operating without licensing from its regulators. Before the implementation of the Security Law early this year, Hong Kong was viewed as a haven. However, this change requires exchanges to factor in the extra cost in compliance which is overly good for the space in the long-term but inconvenient in the immediate term.
Impact on Crypto Prices:
Neutral. The future of crypto depends on regulations. There must exist laws to foster and rearrange the crypto order for its success. Without guidance, trading would be slowed down by chaos which ultimately damages investor confidence.
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