After cleaning up this wave of counterfeit air MLM coins, the regular army will arrive

中本咖喱

特邀专栏作者

2020-01-10 14:41 (UTC+8)

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The regular army is about to enter the field

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The regular army is about to enter the field

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On November 6, 2019, the Hong Kong Securities Regulatory Commission issued the "Position Statement: Supervision of Virtual Asset Trading Platforms", mentioning that it will begin to accept license applications from platform operators who are committed and capable of complying with expected licensing standards and ongoing conduct requirements , a group of legal and compliant digital currency exchanges are coming.

In the past two months, a thorough investigation of digital currency transaction-related activities has been carried out, and arrests have been made in more than a dozen cities including Shanghai, Beijing, Guangzhou, Dongguan, Hangzhou, Shenzhen, and Henan. A large number of exchanges and virtual currency projects were seized, and the proceeds of illegal transactions were seized and confiscated. Bitcoin once touched a price of $6,900. Many celebrities in the currency circle stopped their flags and drums, and secretly withdrew their troops. At that time, we proposed that after this round of clean-up, the state would issue "death-free gold medals" to several companies and support their own companies.

In fact, last year, the Hong Kong Securities Regulatory Commission issued new regulatory regulations such as the "Statement on the Regulatory Framework for Management Companies, Fund Distributors and Trading Platform Operators of Virtual Asset Portfolios" for virtual asset investments such as digital currencies. At the same time, it has begun to conduct "due diligence" on the target company, and is preparing to bring some virtual asset trading platforms into supervision and issue licenses.

The process of obtaining a license is roughly as follows:

The first step is the invitation system. The Hong Kong Securities Regulatory Commission first invites the teams that have passed the "due diligence" before. initial communication. At the same time, it is necessary to have a thorough understanding of the real operation of the regulated party (digital currency exchange), hoping to understand the cost, income, personnel composition, management mechanism, and the prevention mechanism for bottom-line behaviors such as anti-money laundering and anti-terrorist financing... .blah blah blah, the part with the massive "pre-wedding research" section.

The second step is the sandbox supervision period, which is equivalent to "trial love before marriage". Several exchanges will pass the "pre-marriage investigation" just mentioned and enter the 12-month "cohabitation stage". Several exchanges we have learned so far have already started "cohabitation before marriage". Unfortunately, some exchanges have been involved in the "big cleaning of the currency circle" in the past few months. Some behaviors, such as "insufficient profitability or different profit methods (that is, manipulation of currency value)" were found in daily operations, and some were also filtered out.

The third step is to get married officially. At present, it seems that from the introduction of the regulations to the present, we will know in a short period of time that those exchanges will finally "marry" with the Hong Kong Securities Regulatory Commission.

In the end, these exchanges that "want to get married, can get married, and are willing to accept prenuptial agreements and post-marital management from regulators" will get unprecedented rewards.

According to media reports, HashKey Group and HKbitEX are applying for this license, but we don’t know exactly where they have come. However, Binance, Huobi, and OK, which have relatively high voices, are not supervised this time. This is not because of their lack of strength, but because their physical operations are not in Hong Kong and are not within the scope of Hong Kong supervision.

If you want to be included in Hong Kong supervision, you need to meet at least the following conditions
The main legal entity must be registered in Hong Kong. The headquarters and decision-making power must be in Hong Kong.
To comply with the regulations and requirements of Hong Kong financial laws and regulations for third-party auditing of enterprises, for example, ICO tokens need to be subject to trading restrictions within the first 12 months to prevent running away and harvesting investors.
Practitioners do not have resumes of financial violations in Hong Kong. It also requires compliance and investigation of KYC, anti-money laundering (AML), and counter-terrorism financing (CTF) for customers listed on the currency. It involves detailed rules such as asset custody, KYC certification, market manipulation, compliance supervision, accounting and auditing, professional investor thresholds, and anti-money laundering.
The technical support capability of the exchange must meet the requirements of industry standards. Including IT technology can guarantee the stable transaction of the exchange, anti-hacking theft, protect private data, and have a certain financial ability to ensure normal acceptance and settlement, etc.
There must be sufficient commercial insurance support for investor asset protection. It is necessary to insure 100% of the online virtual assets (hot wallets) on the platform, and 95% of the offline virtual assets (cold wallets). And it is necessary to introduce enough institutions to enter the market to ensure the frequency of transactions and the abundance of capital flow.

What is currently being discussed is the norms of the registration system and the approval system. These two norms may be the focus of debate between the regulatory authorities and the regulated institutions. The risk of the approval system lies on the platform, but the rights also lie on the platform, which is easier to supervise. The registration system requires verification of information, and any mistakes must be made in a timely manner. There are pros and cons to each.

There is still a debate now, whether mainland China should also get a few licenses to bring these digital currency exchanges under supervision.

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