While streamlining the existing activities pertaining to crypto exchanges, Hong Kong’s Securities and Futures Commission (SFC) will introduce a regulatory regime namely – Sandbox for crypto exchanges based in the country as reported recently by Ashley Alder, Chief Executive of SFC.

When the crypto-based activities have started gaining its popularity, the authorities and regulators from around the world have acquired to analyze the current regime under the crypto-based activities executed. Further, the authorities would like to see whether the existing frameworks are sufficient enough that support cryptocurrencies and related activities.

Amid this, the advent of “Sandboxes” helps fintech firms to get special regulatory privilege for a certain period of time.

Further speaking to the subject matter, Alder said in his statement that “the new exploratory approach to how virtual asset trading platforms, commonly known as crypto exchanges, might be regulated.”

He further added that “Those exchanges that want to be regulated by us will be set apart from those that don’t, and in the “sandbox” stage no formal regulatory approval will be given to any exchange.”

Besides this, Alder commented profusely during the fintech conference held in Hong Kong that “This is essentially an opt-in approach for exchanges and platform operators, and they will first explore the conceptual framework with us in a strict sandbox environment.”

The SFC would expectedly set up the new regulations through which all the funds that invest almost 10% out of their entire portfolio in crypto assets, will have to follow the regulations irrespective the nature of the securities that they invest.

Amid this, in February 2018, the regulatory further commented on the perspective (mostly cryptocurrency exchanges) saying that “those operate in the former British colony without a license or violate local securities laws.”

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