The Hong Kong Stock Exchange (HKEX) is in the crypto news lately – this time for putting new efforts towards regulation of finance and crypto in the country. The world’s sixth largest stock exchange recently shared the need for regulation in a research paper, keeping up with the pace of financial technologies.
As the paper notes, the existing laws of finance should be applicable to the companies in the fintech space – mostly based on their resemblance with the traditional services. In this manner, blockchain, for example, could be brought inside the space of investment, trading, clearing as well as settlement.
As HKEX noted in the paper:
“Despite the difference in Fintech regulations among countries, the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”
In this manner, crypto innovations can improve the system as much as they can hurt it. The HKEX paper also points out to other countries and their blockchain testing labs.
Towards the end, the report also touches the point that testing models should be extended to non-banking sectors such as blockchain and crypto, stating:
“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”
With this, the HKEX is definitely among the pioneers in the field of regulation in Hong Kong, discovering and implementing new regulations.
UK Research Shows That Private Blockchains And New EU Privacy Rules Might Go Well Together
“There is a risk that this legal uncertainty will have a chilling effect on innovation, at least in the EU and potentially more broadly. For example, if all nodes and miners of a platform were to be deemed joint controllers, they would have joint and several liability, with potential penalties under the GDPR.”However, blockchain operators could be treated like processors the same way the companies behind cloud technologies control the users’ data. Blockchain networks could store personal data externally to meet the rules of the privacy laws or allow nodes to delete the private key that has encrypted information. GDPR rules are really hard to comply with especially for crypto mining businesses which are why the researches urge the European Data Protection Board to create a guide of the protection law that will be clearer.
Thailand’s Deputy PM Calls For Enhancement Of Cryptocurrency Regulations
“The Revenue Department will waive value-added tax for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC),” stated an excerpt of a report at the time.With this, the tax proposals of Thailand's Ministry of Finance also generated controversy over the fact that firms raising funds via ICOs would also be required to pay income tax on those funds.
$68 Million Worth Of Illegal ICOs Brought Down By The SEC Last Year
"Given the explosion of ICOs over the last year, we have tried to pursue cases that deliver broad messages and have the market impact beyond their own four corners.’’In the report also, the Division of Enforcement as a part of the SEC formed a new Cyber Unit that helped this agency focus on cyber-related misconduct. For this reason, the Commission managed to bring down more than 20 cases including those involving ICOs and the Division opened more than 200 cyber-related investigations some of which are still ongoing. Further, in the SEC report, we can read that:
"While many of these cases have involved allegations of fraud, the Division also has pursued enforcement actions to ensure compliance with the registration requirements of the federal securities laws. In the past year, the Division has opened dozens of investigations involving ICOs and digital assets, many of which were ongoing at the close of FY 2018."The Securities and Exchange Commission is now going after other crypto-related entities and startups that are unregistered or show up as unregistered brokers that facilitate token sales.
Full Scale Adoption: Ukraine Plans To Move Forward With Crypto Legalization
“They aim to determine guidelines for token classification. Additionally, they will be touching upon issues that relate to smart contracts and cryptocurrency mining. Therefore, this work will be ongoing. There will be two separate stages to the implementation of this new state policy. The hope is to have this policy in full effect by 2021. In addition to the new state policy, the government notably has brought in a new taxation bill. This outlines a new 5% tax that is payable by entities and individuals with cryptocurrency holdings.”Currently, both the opposing and the ruling party of Ukraine are positive on the long-term growth of the cryptocurrency sector and the blockchain technology.
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