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[Symmetrick]

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[slapper]

Hong Kong market seems to be tougher and tougher recently, especially when Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region was passed. Not good news at all even though they say that they want everything to be transparent. More regulations and laws are created in order to force citizen and investors to comply which decrease significantly the existence of cryptocurrency.

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict. The mandate is essential if we want to integrate bitcoin and other cryptos into our daily life. But If it is an austere regulation, it will force people to stay away from these digital assets. IMO, these rules are not likely innovations at all.

[ChiBitCTy]

Hong Kong decided to fight against unregulated crypto trading by introducing mandatory licensing.

The government planned to release a consultation paper on Tuesday afternoon to collect views on the proposed new rules, which aim to offer investors better protection by combating fraud and money laundering, said Christopher Hui Ching-yu, the Secretary for Financial Services and the Treasury.

Apparently, there is a fight against money laundering and shadow operations, so they want to make everything transparent, so that all exchanges in Hong Kong are licensed, as well as foreign exchanges that provide services to local investors.


Source: https://www.scmp.com/business/banking-finance/article/3108240/hong-kong-plans-ban-retail-trading-digital-currencies-and

This is certainly not surprising to me, knowing China and how they operate. This is also why China has come out with that new centralized "cryptocurrency" where they can completely track how all the money is being spent.  China is all about full control.  Not saying this aspect is not the right thing to do, but they don't just care about the illegal activities.

[hugeblack]

Regulatory pressure to get more money, it appears that countries will accept digital platforms in exchange for imposing more taxes on them.
The current approach will allow many service providers to make more efforts, especially since most of them establish these companies by disregarding fraud and price manipulation.

[Darker45]

To a certain extent, this is the expected fate of Bitcoin and cryptocurrency and the businesses associated with them. This is the price Bitcoin has to pay for getting into the mainstream society and becoming legal. It simply cannot avoid getting regulated. After all, being regulated is more or less the same with being acknowledged, although it could also mean being controlled and taxed.

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict.

But it still won't save them from Hong Kong's crypto market regulation, because regulation will also affect third-party platforms that provide services to local investors. Someone will generally leave the Hong Kong market without further services.

Well, let them learn something very precious from the BitMex fiasco. Moving to places where laws are less strict and licenses are as cheap as a coconut may not save them from legal responsibilities abroad. If these exchanges leave Hong Kong, they better make sure there is not a single Hong Kong citizen which uses their platform.

[The Sceptical Chymist]

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict.

Yeah, I hear the regulatory bodies in Antarctica and on the International Space Station are pretty lax, so perhaps there will come a day where either of those places host the crypto exchanges that don't want to have to bend over and spread 'em for their current government.

Ugh.  This news isn't really surprising, and I don't even know how significant it is.  This has been the trend as far as regulating crypto goes for some time now.  That statement by the Hong Kong government was typical bureaucratic doublespeak, and those always make my skin crawl no matter who it is that's making it.

[Lorence.xD]

It is a fair regulation personally, this reduces the chances of scammers and price skimmers from exploiting the unruly volatile prices of digital currencies. I may not like People's Republic of China, to be fair, their laws favor people more than anything. On the other hand, this could mean that registered platforms for trading digital currencies will raise their transaction fees because there are less if no unregulated competition, right?

[so98nn]

Hong Kong decided to fight against unregulated crypto trading by introducing mandatory licensing.
Apparently, there is a fight against money laundering and shadow operations, so they want to make everything transparent, so that all exchanges in Hong Kong are licensed, as well as foreign exchanges that provide services to local investors.

Licensing of the exchanges would mean that they will have to get all the user details with KYC verification up-to date. That would in turn mean that users in the hong-kong wouldn't be able to make anonymous transactions.

I wonder what will happen if they make it more stringent and ask for the details of users to "to whom" they are sending the money outside the Hong-kong?

May be we will have to consider this as partial anonymous nature of transaction.

The recent history with BitMEX and OKex has served as a catalyst for global regulation. Now all exchanges will have to submit a corresponding application.
Restrictions for retail investors again, reminds me of the recent restrictions for retail investors in England. The trend towards bans and regulation continues.

Ahh, this is the only stuff that will be happening good enough if they regulate the whole exchanger way of transactions. Currently I suspect that people may not be liking the way regulations are getting imposed within Hong-Kong for the reason of identity exploration.


Money laundering is not new for any country. Considering the fact that not everyone is doing money laundering this decision is gonna hamper the normal traders who may wish to have small winning, savings for their retirement without paying taxes on it!

IDK, but that much freedom needs to be their for humans. 

[hatshepsut93]

Ugh.  This news isn't really surprising, and I don't even know how significant it is.  This has been the trend as far as regulating crypto goes for some time now.  That statement by the Hong Kong government was typical bureaucratic doublespeak, and those always make my skin crawl no matter who it is that's making it.

Actually this seems to be pretty unique, I don't remember another cases of retail investors getting banned from trading crypto. It's not very significant news, because Hong Kong isn't a host to a large amout of crypto volume and adoption, but if it's actually China testing the waters before implementing similar laws on mainland, this could be pretty big. And locally it will have a huge impact, I doubt that majority of crypto investors are whales who hold $1 mil USD in assets, so exchanges will lose a huge share of their customers, maybe even forcing them to close, while people will have to resort to p2p trading, which is often risky.

[teosanru]

I think this is the way how things are going to go forward. I think many countries could take idea from this system. Because obviously no matter how much we talk about P2P trust the retail investor always gets scammed so I think it's better this way than having a complete ban. Moreover it would be interesting to see the take of China on this and their one China policy.

But yes the concern legit too it destroys the very prime feature of cryptocurrencies. It would make cryptocurrencies markets more like forex market just a handful of exchange in each country with all shady ones going down. Won't be surprised if they start intervening in the selection of Board of directors and management too.

[goaldigger]

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict.

But it still won't save them from Hong Kong's crypto market regulation, because regulation will also affect third-party platforms that provide services to local investors. Someone will generally leave the Hong Kong market without further services.

Either they comply or leave the HongKong market, this is the only option for them. Those who want to make real business with them just simply follow the law so technically cryptocurrency is not banned at all, HongKong government just want to regulate it to minimize illegal transactions. This country is almost digital now, its also good for them to have options like this and cryptocurrency can be a big help as well.

[crwth]

Most of the people there are probably using Cryptocurrencies to avoid taxes. Knowing that they have something against the government there, I remember an article in which they use it for funding rallies and make even more noise to stop the government. They are probably working on now to eradicate those types of sources and regulate everything.

Anybody from Hong Kong that resides there, and how is it going with the crypto life there?

[samcrypto]

Most of the people there are probably using Cryptocurrencies to avoid taxes. Knowing that they have something against the government there, I remember an article in which they use it for funding rallies and make even more noise to stop the government. They are probably working on now to eradicate those types of sources and regulate everything.

Anybody from Hong Kong that resides there, and how is it going with the crypto life there?

I also heard this rumor where cryptocurrency are being used to support those anti-government and make more rallies so yeah this can be one of the reason why they are making pressure to the crypto exchanges. Beside, they are under control of China so maybe the Chinese government wants to introduce their digital currency to HongKong as well. If those exchanges can’t follow the new regulations then its sad for Hongkongers to lose another freedom.

[NeilLostBitCoin]

this will reduce fraudulent act of people, but it will also affects the current price of bitcoin and other altcoin, but it will not have a huge impact but slightly changes, since the lost number of people uses crypto is in Asia. but since we already know that China has already a plan having their own coin digital yuan, maybe that is one of the reason, but I cannot say that digital yuan will stop other altcoin to be purchased in hk.

[Ryker1]

Well, at some point this shows Hong Kong actions can still be considered as an advantage for it will help bitcoin and other cryptocurrencies away from any felonious act by a culprit and providing license means legalization which gives me an idea of acceptance of cryptocurrencies in Hong Kong market and that is favorable to bitcoin. However, -- on the other hand, if they will continue to ban retail investments then it will only trigger the people to do it secretly or through underground activities which might be caused more serious problems for the Hong Kong government afterward.

[stompix]

Hong Kong decided to fight against unregulated crypto trading by introducing mandatory licensing.

I find it amusing that some articles still treat Hong Kong as an entity that has and can decide something on its own.

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict.

Yeah, I hear the regulatory bodies in Antarctica and on the International Space Station are pretty lax, so perhaps there will come a day where either of those places host the crypto exchanges that don't want to have to bend over and spread 'em for their current government.

Or, you could move to Malta, but not ask for a license. Binance knows how to do it.
I think this will be the final nail in the coffin for a lot of them, they have to either flee and hope they can keep their business alive somewhere else or simply shut down. No surprise, China is not going to wait a hundred years for the sake of the "one country two systems" promises, they will slowly make sure everything falls piece by piece under their control.  I'm sure they look at it as an exercise of imposing new rules in a totally different system with a hostile population, they have some future plans for other regions most likely.

The operators must make sure there are no retail investors trading on their platforms, which should only be available to professional investors who have over HK$8 million (US$1.03 million) in assets, according to Clara Chiu, director of licensing and head of the fintech unit of the SF

The SFC will also require the operators to ensure customers’ assets are safe, and put in place measures to prevent market manipulation and money-laundering activities, Chiu said at the same event.

...and next time half of those assets must be in the custody of the CCP at all times.

Oh yeah, all this has centralization and control written three times with 10-foot bloody letters on it.

[tbterryboy]

Wouldn't expect this from Hong Kong because usually they are one of the most elite tech places in the world while not having that much influence from China like they used to, they are still basically controlled by CCP and China is in love with crypto with all their digital yuans and many more stuff that they are dealing with.

I am not really sure if China wants to have all the crypto to themselves but while considering Hong Kong had riots against China and lost, China still likes crypto so Hong Kong should too right?

Maybe it is something else and Hong Kong will just readjust to something totally different and have their own trading places where it would be local and that would be much better for them and would ban using other nations places to stop making them profit.

[Fortify]

I think pretty much every country around the world will introduce these sort of laws eventually - except the the current (and new?) tax havens of course who will offer this sort of shielding as protection for their clients. China in particular does not want any funds outside of the control of the CCP and it was inevitable that they would want to track where money is moving. As Hong Kong has all prior freedoms stripped away, bit by bit, it will eventually just end up as yet another Chinese city - instead of the pioneer booming financial hub it once was.

[exstasie]

I believe that most exchanges will choose to move out of this region and place their headquarter in places where laws are less strict.

Yeah, I hear the regulatory bodies in Antarctica and on the International Space Station are pretty lax, so perhaps there will come a day where either of those places host the crypto exchanges that don't want to have to bend over and spread 'em for their current government.

It wouldn't matter to the US government. They've always maintained the position that if you serve US customers, you're doing business in the US and therefore need to conform to US law. With the case against Bitmex moving forward, they are now taking things a step further, by demanding that exchanges implement mandatory KYC to ensure US customers aren't slipping by through VPN.

Uncle Sam to the rescue!

This news isn't really surprising, and I don't even know how significant it is.

It's not clear. A lot of exchanges operate from Hong Kong but maintain their entity registrations and/or licenses elsewhere. I assume this will push some of them to move their operations offshore.

[AndySt]

I think pretty much every country around the world will introduce these sort of laws eventually - except the the current (and new?) tax havens of course who will offer this sort of shielding as protection for their clients. China in particular does not want any funds outside of the control of the CCP and it was inevitable that they would want to track where money is moving. As Hong Kong has all prior freedoms stripped away, bit by bit, it will eventually just end up as yet another Chinese city - instead of the pioneer booming financial hub it once was.

Hong Kong served as a financial gateway to mainland China at one time before its reunification with China. During this time, mainland China has already grown its own financial centers such as Shanghai and Hong Kong is no longer so important for the Chinese economy. Moreover, the United States, together with the countries that joined it, by imposing its sanctions against Hong Kong, only deepen this process and the speed of the process. Paradoxically, the United States, while verbally protecting democracy in Hong Kong with its sanctions, is acting in the interests of China, reducing the importance of Hong Kong as a financial center, while increasing the role of internal Chinese financial centers.