Hong Kong Issues Rules for Crypto Asset Managers

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Hong Kong’s Securities and Futures Commission (SFC) has recently released rules and regulations for fund managers dealing with crypto assets.

The securities regulator published a 37-page document titled “Proforma Terms and Conditions for Licensed Corporations which Manage Portfolios that Invest in Virtual Assets” on October 4, 2019. It provided detailed guidance for entities managing portfolios that invest in “virtual assets,” its term for cryptocurrencies.

According to the document, virtual asset fund managers in Hong Kong should at all times maintain liquid capital at a minimum of 3 million Hong Kong dollars (roughly $380,000) and its variable required liquid capital. In addition, sufficient human and technical resources and experience are required, depending on the amount of assets under management.

As opposed to mainland China, where ICOs and exchanges providing cryptocurrency trading have been banned since September 2017, the securities regulator lays out a legal framework for ICOs.

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