The securities regulators of Hong Kong started to let companies apply for a crypto fund license about a year ago, but not many licenses were issued so far. According to a recent report made by Reuters, the Securities and Futures Commission of the region is denying most of the applications, which is getting in the way of making cryptos mainstream in Hong Kong.
Initially, the regulators decided to start emitting licenses at the end of 2018. They would work as way for the markets to be protected from scams, as people would be able to check if a company was really licensed to operate in the country.
These licenses were among the first ones in the global scenario. They would allow managers to sell virtual assets for investors. Unfortunately, most companies are struggling to be approved, as the requirements are steep and the regulators do not seem to be satisfiable.
One of the main reasons why companies are having so much trouble to comply with the requirements is because they are mostly very small in both size and ambitions. It seems that the regulators predicted that only large funds would try to get the license, so they tailored the requirements for them.
In its report, Reuters identified a single company that was approved for a license: Diginex. The company operates a kind of “fund of funds”. The reason for that is because the approved companies are not publicly listed.
The CEO of Diginex, Richard Byworth, affirmed that the company believes that regulation is important in order to build a trustworthy relationship with the clients, which is why they did it as soon as possible.
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