Hong Kong is a region that has been marked among cryptocurrency investors as the next big market. However, the regulatory landscape for the region is still changing and transforming. Security regulators of Hong Kong published the updated policy charter for the cryptocurrency sector following the catastrophic demise of the JPEX exchange.
Local media outlets have reported that the Securities and Futures Commission (SFC) of Hong Kong has updated its terms of policies surrounding virtual currency sales and other services.
Amendments in the Existing Regulatory Framework
On this account, the regulatory agency added some amendments to the existing regulatory framework to account for the market changes and inquiries. Recently, a notice issued by SFC updated the concerned stakeholders. One of the policies retains that specified crypto products will be available to professional investors only.
Additionally, the regulations also mandated the investors to measure if cryptocurrency investors with intermediate market exposure have the right qualifications for investing in virtual currencies before handling new transactions.
Unclear Trading Regulations
The regulatory agency has stated that virtual currency trading is becoming a popular mode of investing in some parts of the world. However, on the whole, the regulatory clarity and legislative guidelines for the regulators have remained uneven.
On this account, the regulator continued the risk assessment for cryptocurrency investors that it aired in 2018. Furthermore, SFC officials have also marked down virtual currency assets as complex trading products.
On this account, SFC intends to bring the same regulatory obligations and implementations as the rest of the financial markets. The agency focused on crypto ETFs and products that are listed outside of Hong Kong as some examples of complex trading options.
On the other hand, crypto investors in Hong Kong are worried about the scandal that arose from the fall of JPEX. SFC issued a warning in September after receiving news of a loss of millions of dollars.
The regulatory agency received more than 1,000 complaints from investors. Following the incident, police arrested six employees from JPEX on the charge of operating an unregistered cryptocurrency exchange.
The Impact of JPEX’s Controversy on Crypto Regulations
There are some speculations that the changing cryptocurrency policies in Hong Kong are a direct result of JPEX controversy.
On the other hand, SFC officials issued a statement in September claiming that the regulator has increased their efforts to inform cryptocurrency investors about possible threats and risks in the future.
In October, Hong Kong Police Force and SFC setup a working group to identify and monitor illegal activities in the virtual currency sector. Another controversial in Hong Kong related to cryptocurrency sector in Hong Kong is Bitcoin mining farm Bitmain.
The firm fired and blacklisted three of its employees for speaking to media regarding delayed salary payments.
As per the notification issued by the firm, the employees in question breached several clauses in their employment contract. Bitmain told the media that the firm reserves the right to pursue legal action against the individuals. However, the firm has retained that without proper authorization nothing is certain.
The news was published by Cointelegraph on 9th October that Bitmain allegedly withheld the salary payments of its staff. The company retained that it was yet to receive a positive cash flow on account of new ASIC purchases. The article also purported that some employees received a 50% cut on their base salary with the removal of bonuses and incentives.