How Strict Are Hong Kong’s Crypto Regulations?

The Asian market is a booming hub for crypto at the moment. Countries like Singapore, Hong Kong, Thailand are all encouraging crypto to grow in their respective nations. But a country’s stance towards crypto can be only gauged by evaluating their policies and regulations.

Recently it has come to light that Hong Kong is going to tighten their cryptocurrency laws and regulations. The secretary of Hong Kong’s Financial Services and the Treasury has made announcements which confirm this apprehension.

He stated that crypto mining operations are regulated by local trading law. It is also of interest to the Legislative Council of Hong Kong, whether mining is regulated under the Trade Descriptions Ordinance (TDO). Secretary James Lau has confirmed that the sale of mining equipment and any other products related to crypto falls under the TDO.

Now in this larger context, fraudulent activities are going to be dealt with in a more strict manner. Unfair practices like misleading omissions, aggressive commercial practices, fabricated trade descriptions and wrongly accepting payment, among others. Illicit mining activity is liable to a $500,000 fine or five years in prison.

This comes in the wake of news that the Hong Kong regulatory body, the Securities and Futures Commission (SFC) plans to introduce stricter regulatory policies for virtual currency exchanges and startups. This apprehension was triggered by money laundering and fraudulent practices surrounding ICOs.

Many major fraud cases have been reported in Hong Kong of late. People have been arrested for luring in victims to fake ICOs and soliciting millions of dollars from unsuspecting investors. This is becoming a serious concern for the country’s crypto industry, whose reputation takes a hit everytime a fraud is committed on such a large scale.

The Asian market is working extremely hard to put in place regulatory frameworks guiding cryptocurrency, which are at par with Western counterpart. Some of the biggest hacks in virtual currency history have taken place in Asia. We expect stricter laws to deter criminals but also hope that it won’t stifle the growth of the crypto market.