The Hong Kong Securities and Exchanges Commission (SFC) is looking to tighten the current cryptocurrency laws as concerns over crypto-crime and money laundering heighten across Southeast Asia.
The SFC plans to put exchanges, traders and other related companies under the oversight of the Securities and Futures Commission.
According to the SFC's guidelines, investment funds will be required to obtain a license if more than 10% of the assets they manage are made up of bitcoin or other cryptocurrencies, and will be allowed to sell related products only to professional investors.
The SFC also want to set up a voluntary scheme where exchanges will be able to test their digital assets in what is being deemed a “temporary regulatory sandbox” and will then be able to decide whether they need to seek a license.
Companies can only issue ICOs for tokens that fulfilled SFC’s requirements and also tokens must have existed for at least 12 months.
The Hong Kong SFC have been warning the industry for many months about their plans to impose tighter cryptocurrency laws. Earlier this year in February, the SFC warned seven cryptocurrency exchanges in the wake of complaints made by investors.
It is hardly surprising that Hong Kong is looking to tighten cryptocurrency laws as many major economies across the world are currently reevaluating their stance on crypto regulations.