China coin just narrative myth or...?
7️⃣ Key takeaways on HK SFC guideline after chat with Hong Kong crypto lawyer
❓What happen to China & Hong Kong Hype?
Myth? Bullshit Narrative?
i spoke with a Hong Kong crypto lawyer and heres
7️⃣ Key takeaways on HK SFC guideline n why the china hype wont take place till later
A guideline SFC (securtites & futures commission) published that took effect on 1st June.
I did not post it early in case as im not a specialise in this field nor will i pretend to be, open to criticism & to be enlighted.
TLDR
More retail users can come in, but limited asset to trade
VA ( virtual asset platfroms ) can't list shitcoin, derivatives or trading tools/ bots
Its easier & quicker to run VA (from my understanding but not 100% sure)
1️⃣ VA platforms can offer services to retail investors
[ confirmed ✅ ]
This is bullish because previously u can only invest if u were a credited investor. (8m hkd, ~1m usd)
📈More fresh blood, more people in the rabbit hole
pump our bagssssss
2️⃣ No offering of or trading in VA derivatives
[ confirmed ✅ ]
📉 No 100x perpetual, less speculative tools
3️⃣ No prop trading, algo trading, earn/yield, lending and borrowing
[ confirmed ✅ ]
Why not? VA platforms should focus on primary business as an agent, to match client orders
📉 No speculative tools, No trapping user with 100000% apy on a shitcoin
4️⃣ Listing of tokens
VA platforms must conduct due diligence on each token before admitting it for listing
[no exemption ❌ ]
Non-security token need to have at least 12-month track record prior to listing
[no relaxation ❌]
📉 NO SHITCOIN COMING IN BRO
VA platforms can rely on smart contract auditing done by an independent assessor [new clarification❓].
Certik shoot ur shot bro lmao
Tokens for retail access must be eligible large cap virtual asset included in at least 2 acceptable indices issued by 2 independent index providers
[ confirmed ✅ ]
SFC will not publish a whitelist of acceptable tokens or acceptable indices, but refers to IOSCO Principles for Financial Benchmarks.
📉This limits the amount of asset and the cost of for VA platforms
No need to submit legal opinion (to confirm tokens for retail access is not security token) to SFC
[relaxation ✅]
Stablecoins is not available for retail trading, prior to stablecoins regulatory arrangements being implemented
[new🆕]
A more holistic regulatory regime on stablecoins is expected to be announced by Hong Kong Monetary Authority (HKMA) soon.
5️⃣ Insurance and compensation arrangement
Min 98% of client VAs need to be held in cold storage,
with 50% [lowered ✅]insurance/compensation coverage.
Max 2% of client VAs in hot or other storage, with 100% [no change] insurance/compensation coverage.
Reserve funds can include virtual assets [new clarification🆕],
in addition to demand deposits or fixed deposits with short maturity
Bank guarantee from Hong Kong banks is now added as a possible compensation arrangement [new🆕]
6️⃣ Custody and security requirements
Use of third party custodian is not allowed [confirmed✅]
- due to lack of regulatory regime in Hong Kong for VA custodians.
NOT UR COMPANY KEYS NOT UR COMPANY CLIENT lol
All seeds and private keys need to be securely stored in Hong Kong, with appropriate certification such as Hardware Security Module
7️⃣ SFC will adopt a streamlined application process for the dual licensing regime
(Type 1, Type 7 licence and VASP licence) so that only a single consolidated applications needs to be submitted, with ROs being concurrently approved under both SFO and AMLO
📍 Summary
More retail users can come in
VA ( virtual asset platfroms ) can't list shitcoin, derivatives or trading tools/ bots
Its easier & quicker to run VA (from my understanding but not 100% sure)
📍 My thoughts
fresh money is coming in, but likely just for BTC, ETH.
unprofesstional view, there might be a small chance of large cap coins like XRP, ADA, Litecoin, SOL etc listed because they are large cap that has been around then kinda had some sort of track record
I wouldn't buy those "china coins" as a narrative as its quite clear shitcoins wont be listed.
But as always in crypto, we are not logical or reasonable so if u miss a pump don't blame me.
My motto has always been, there are multiple opportunties to make it in crypto, risk management is key. small size gamble but never go all in.
play safe guys
Now thats a wrap.
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