Proposed laws focusing on Hong Kong’s blockchain business may have far-reaching penalties for the crypto derivatives market, in line with new analy
Proposed laws focusing on Hong Kong’s blockchain business may have far-reaching penalties for the crypto derivatives market, in line with new analysis from Messari.io.
In a report revealed on Wednesday, researcher Mira Christanto mentioned the Particular Administrative Area of Hong Kong, which occurs to be the dominant marketplace for crypto futures buying and selling, might be clamping down on unregulated exchanges as a part of a broader push for extra governance.
The researcher cited a latest proposal from the Hong Kong Securities and Futures Fee, or SFC, that might require all crypto companies to fall below anti-money laundering guidelines. This can be a important departure from only one 12 months in the past when the SFC introduced it will solely regulate corporations within the ‘securities’ house.
Beforehand, the SFC solely regulated belongings that meet the authorized definition of securities or futures — a definition that excluded cryptocurrencies.
As Cointelegraph reported earlier this month, the Hong Kong authorities has proposed to deliver all cryptoassets below the oversight of its securities regulator. The regulatory push seems to be a part of a worldwide initiative to rein in cryptocurrency exchanges, probably below the guise of cash laundering considerations.
As Messari notes, Hong Kong simply so occurs to be essentially the most dominant participant within the crypto futures market. Almost three-quarters (72%) of Ethereum (ETH) futures and 57% of Bitcoin (BTC) futures come from the Particular Administrative Area.
Christanto mentioned:
“Many individuals don’t notice the function Hong Kong performs within the world cryptocurrency house. Hong Kong is house to a number of the largest enterprises and dominates the rising futures market.”
Hong Kong host a big presence of cryptocurrency exchanges and market companies corporations, together with BitMEX, Bitfinex, Crypto.com and FTX. Exchanges like OKEx, Huobi and Bybit keep regional places of work within the semi-autonomous city-state. Giant business gamers like Tether, Cardano and EOS writer block.one are additionally located in Hong Kong.
If the brand new proposal passes into regulation, enterprises that proceed to function and not using a license may face stiff penalties. There’s even the potential of jail sentences for firm executives who run these platforms.
As Messari notes, so far, solely two crypto monetary companies corporations have obtained licenses in Hong Kong.