It seems that the regulatory ambiguity in Hong Kong continues to play a negative role for investors in the cryptocurrency market. The official regulatory agency does not provide clarity on these issues. The information was published by the South China Morning Post on 26 November.
Although there have been several positive comments on the blockchain technology and the fintech industry, the regulatory framework is not clear in this regard. Clearly, Hong Kong has not banned virtual currencies or ICOs as China did, however, it has not been able to improve the situation of these companies in the country.
The Hong Kong Securities and Futures Commission (SFC) recently proposed a "sandbox" for crypto trade. The SFC explained that the new approach does not apply to traders who trade digital assets considered as futures derivative contracts. The approach still needs to be implemented and applied, but it seems that once applied it will not regulate trades that deal in futures and derivatives contracts related to cryptocurrency. Will these products and services not regulated?
In case there is a specific case of fraud or manipulation in the market carried out by such exchanges, the interested investors would not be able to request the help of SFC.
This is also related to what happened with the cryptocurrency OKEx exchange that prematurely terminated the Bitcoin Cash (BCH) contracts and generated losses of over $ 400 million to investors. If the Hong Kong law is applied to that case, the decision taken by OKEx was not illegal.
There have been other complaints about the crypto exchange. For example, the trading company Amber AI has accused the exchange of manipulating the cryptocurrency market that is liquidating BCH futures. This is not the first time that OKEx is involved in such a situation on the market. On September 12th, the founder of the OKEx stock exchange, Star Xu, was accused of being involved in a fraudulent scheme related to the WFEE currency.
Countries around the world are starting to develop regulatory frameworks linked to virtual currencies. Malta is one of the clearest examples of how the appropriate regulations have a positive effect on the market. There are several companies on the island that have established their operations there.