Positive Regulation Hasn’t Yielded Positive Outcomes for Hong Kong’s Crypto Funds | BTCMANAGER
Bitcoin, Blockchain & Cryptocurrency News
Hong Kong announced a progressive policy implementation last year that would allow fund managers to invest in crypto assets. This hasn’t produced expected results as only one fund has been confirmed to have cleared the regulatory hurdles set by the Securities and Futures Commission (SFC). According to Reuters, several funds in the region have even shifted their domicile offshore to avoid strict regulation, November 5, 2019.
Institutional Woes and Regulation
In late 2018, Hong Kong’s SFC introduced a licensing scheme for crypto-assets and other similar investable products. Under the scheme, an investment manager would have to set up a traditional hedge fund structure and apply for a license. This was expected to be a huge boon for crypto investing in the region.
Sadly, this narrative has not played out. While many have applied, there is only one confirmed fund operating in the industry: Diginex.
Sources with knowledge regarding the state of the domestic regulation believe larger investment managers have shied away from the asset class, while smaller investors are either awaiting response or never got around to applying in the first place.
Gaven Cheong, a partner at Simmons & Simmoms Hong Kong office, offered his comments on why this scenario has played out.
“Last year, there was a lot of excitement but since then we haven’t seen much activity. Not many new managers in this area have the background, experience, or support to mount such an undertaking.“
Reasonable Regulation and Knowledge Building
The main thing hindering crypto,