Hong Kong SFC Crypto Regulation Update: Impact on Top Digital Assets and Market Debates

Hong Kong skyline with futuristic financial buildings, SFC consultation in progress, crypto coins such as BTC, ETH, LTC, BCH, highlighting top digital assets, warm sunlight reflecting on glass, watercolor art style, balanced composition, morning light, mood of cautious optimism, debate over crypto regulations visible.

Hong Kong’s Securities and Futures Commission (SFC) recently concluded its consultation on proposed rules for crypto assets, a significant development as crypto-linked firms and investors worldwide seek clearer regulations. Some experts suggest that this update to the Hong Kong SFC might lead several top digital assets to surge ahead.

The general framework is reportedly similar to the previous one in many aspects. The Hong Kong government has stated that cryptocurrencies purchased by retail investors should be included in at least two major indexes, setting the minimum requirement. BTC, ETH, Litecoin (LTC), Bitcoin Cash (BCH), Polkadot (DOT), and Solana (SOL) are included in at least three major indexes. Meanwhile, Cardano (ADA), Avalanche (AVAX), Polygon (MATIC), and Chainlink (LINK) are additional coins that appear on just indexes.

These cryptocurrencies are expected to be listed in the first batch of Hong Kong-compliant exchanges, which could lead to increased trading activity and value appreciation. However, some skeptics argue that limiting the list to a select few digital assets may not accurately represent the broader market and may exclude promising projects from the spotlight.

According to the Hong Kong SFC, non-security tokens must have a 12-month “no bad background” period. Stablecoins, on the other hand, are not currently part of the regulations. The authority has not yet allowed stablecoins to be purchased by retail investors, which could impact the rising popularity of these coins and cause tensions between regulators and stablecoin proponents.

The SFC also indicates that EARN and lending services will not be supported as part of this regulatory update. Furthermore, advertising activities connected to some digital assets will be excluded, while proprietary trading is prohibited, and platforms are not allowed to hold any crypto assets.

While the Hong Kong SFC’s efforts attempt to bring clearer regulations for crypto assets, it seems there are still some key areas of debate. These include the selection criteria for cryptocurrencies, the exclusion of stablecoins, and the limitations imposed on EARN and lending services.

In conclusion, Hong Kong’s SFC update could boost the popularity and value of selected digital assets, but it might also spark new discussions about crypto regulation and the need for a more comprehensive approach that takes into account the variety and complexity of the market. As always, it is essential for investors to do their market research before investing in cryptocurrencies, as market conditions can change rapidly and unpredictability remains inherent in the sector.

Source: Coingape

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