Hong Kong regulator sets out rules for crypto exchanges to get licenses
Hong Kong’s Securities and Futures Commission has published new rules that will allow crypto exchanges to obtain an operating license. The new rules are based on those for traditional securities brokers and stipulate that exchanges only serve professional investors, have an insurance policy to protect against lost or stolen assets, and utilize an external market surveillance mechanism. Exchanges that offer trading in assets like Bitcoin, which are not considered a security, will not be required to obtain a license.
Why it matters:
- Hong Kong is home to many crypto exchanges and has strong ties to China, which has made a recent push to become a blockchain superpower. Though there are still restrictions on crypto trading in China a regulated Hong Kong market could help bring some exchange services back to the mainland.
- Governments are starting to realize that crypto is not going away, and by providing specific rules and regulations they are adding legitimacy to the industry.
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