Hong Kong watchdog to set new crypto exchange rules

Representative image. (Photo/Pixabay)

Hong Kong's financial regulator will publish a regulatory framework for cryptocurrency exchanges later on Wednesday, Chief Executive Ashley Alder announced at a fintech conference in the city.

The rules will cover custody, know-your-customer rules and the storage of crypto assets, among other issues.

Alder, head of the city's Securities and Futures Commission (SFC), first announced initiatives on digital currencies at Hong Kong's 2018 Fintech Week a year ago, including a "sandbox" for crypto exchanges, as a way for the regulator and exchanges to discuss ways to oversee digital currencies.

The regulator is taking that work forward, Alder told the conference on Wednesday.

"The framework will enable virtual asset trading platforms to be regulated by the SFC, a major development which builds on a way forward I outlined at the same time last year."

Market watchdogs around the world are debating how to, and whether they should, regulate the cryptocurrency industry. So far, they have mostly focused on protecting investors from scams based on digital assets.

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