Despite the civil unrest that Hong Kong has been going through, the government agencies have been fast at work to keep the markets active and not allow the protests to disrupt and have serious repercussions on international business.
The regulation has been in the works for a couple of months now, and almost every crypto company located in Hong Kong was expecting a slightly lenient regulation due to the location’s positive relations with financial assets.
Details of the regulation
According to the draft, all cryptocurrency fund managers are tasked to have at least 3 million HKD (380,000 USD) in reserve for liquidity.
Furthermore, they’re tasked with segregating the company’s bank account from fund accounts as well as customer accounts.
However, this is only active when customers transact fiat currencies in exchange for cryptocurrencies.
This is mainly done to ensure the safety of customer funds should any issues arise in the technical side of the fund manager’s database (something we’ve seen occur all over the world).
Further guidelines include the acknowledgment and compliance with the country’s AML and KYC rules as well as risk management and compliance policies.
In regards to the technical side of the business operations, fund managers are tasked to pay more attention to security controls for key generation and the syncing with blockchain forks. Naturally, the protection of customer data is included in these guidelines as well.