The Hong Kong Securities Regulatory Agency issued a statement setting guidelines for cryptocurrency funds on Thursday 1 November, saying it could shift to formally regulating trade.
In what he called a "guide to regulatory standards", the Securities and Futures Commission (SFC) of the autonomous territory of the Chinese territory set in motion a series of steps that Chief Ashley Alder suggested that it would culminate in a formal regulatory environment.
Hong Kong differs significantly in its cryptocurrency approach from mainland China, with the exchange of cryptoassets and related legal activities, although it is awaiting formal regulation.
"The virtual resources market is still very young and trade rules may not be transparent and fair," said alias Bloomberg during a fintech forum on Thursday:
"The interruptions are not as rare as the manipulations and abuses of the market, and there are also, I'm afraid, real scandals and frauds".
The latest proposals concern fund managers who invest more than 10% of their participations in cryptocurrency, with entities that offer exclusively professional traders able to adhere to a sandbox scheme designed to give more room for the development of new products and services.
For others, a licensing process will require entities to inform the SFC about their business practices.
The declaration says:
"In order to offer better protection to investors, the SFC believes that all authorized portfolio managers who wish to invest in virtual assets should essentially observe the same regulatory requirements even if the portfolios (or portions of portfolios) below their management invest exclusively or partially in virtual assets, regardless of whether these virtual assets amount to "securities" or "forward contracts". "
Cryptocurrency exchanges could also fall under the supervision of the SFC in the future.
"… It is proposed that the conduct regulatory standards for virtual asset trading platform operators should be comparable to those applicable to existing automated trading service providers," he adds.
The tightening of regulatory oversight by Hong Kong comes as more and more jurisdictions move to do the same, with the stabilization of Bitcoin and the main altcoin markets and the general acceptance of their longevity begins to crystallize.
Last week, Taiwan announced that it will publish the dedicated rules governing initial coin offerings (ICOs) by June of next year, having previously chosen not to regulate the sector.