The Hong Kong Securities and Futures Commission announced new regulations for cryptocurrencies this week, according to the South China Morning Post. The SFC rules were unveiled in two circulars released on Thursday.
One of the circulars includes new guidelines for digital currency exchanges that will require them to join a regulatory “sandbox” that will allow them to continue operations during their licensing negotiations with regulators. SFC head Ashley Alder said that the sandbox was important since those crypto exchanges won’t be able to meet traditional exchange requirements.
The other circular addresses funds that invest in cryptocurrencies. It includes restrictions on retail Bitcoin investors, who will be banned from using those funds to trade Bitcoin. Only professional investors with investment assets of at least HK$8 million and a minimum two years’ investment experience will be allowed to participate in that trading activity.
Hong Kong Securities Association chairman Gary Cheung suggested that the new regulations will position Hong Kong as a leader in crypto trading:
“It will boost investor protection and hence attract more mainlanders to trade cryptocurrency assets in Hong Kong. This will help Hong Kong to be among the top cryptocurrency trading centres worldwide because proper regulation is very important for attracting the big players.”