Hong Kong’s Securities and Futures Commission (SFC) is exploring ways to regulate the various cryptocurrency trading platforms already operating in the city and thus tighten investor protection, says its outgoing chairman Carlson Tong Ka-shing.
His chief sensitivity, however, he told South China Morning Post, is that the SFC is technically restricted by its legal regulatory reach of securities only.
“We do not think imposing a total ban on these platforms is necessarily the right approach, and it will not work in today’s internet world when trading can cross national boundaries,” said Tong, who is due to hand over the SFC’s reins to Tim Lui Tim-leung on October 19.
Similar to traditional stock exchanges, centralised crypto-exchanges are generally run by organisations that oversee their operation, maintenance and security, and which grant users access to the platform by paying a fee. Several are being operated in Hong Kong, but they remain unregulated.
The SFC has issued several warnings in recent months for investors to be wary of trading on them, and to the operators, too, that they must in turn abide strictly to SFC regulations.