A year after SFC’sHong Kong Securities and Futures Commission (SFC) released initial guidelines for funds investing in cryptocurrencies, just one firm has effectively passed that gauntlet.
Hong Kong-based Diginex remains the sole cryptocurrency fund to pass the administrative hurdles given in November last year and formalized this October, as per research from Reuters.
As previously reported at the time, the 2018 structure applied new guidelines to any fund that invested 10 percent or more of its portfolio in digital assets. The 37-page guidance published a month ago embraces numerous standard practices held by funds administered by the regulator already like capital reserves on hand. New rules incorporate who can go about as overseer for cryptocurrencies, for instance.
Still, just one firm has cleared the SFC’s hurdles as of now, Reuters states, while different funds are moving out of Hong Kong to “skirt” the SFC. Numerous organizations are likewise applying for endorsements without the expectation of getting the license, but only for appearances, as indicated by the Reuters research.
Notwithstanding, outside factors stay for the low volume, including probable hangover from the crypto winter that might be providing spurned funds second thoughts
“The volatility and poor returns in 2018 scared large institutions away from allocating to crypto funds, causing those who survived to shelve their licensing plans,” Jehan Chu, partner at Kenetic Capital, a VC firm concentrating on cryptocurrencies, told Reuters.
SFC declined to give remarks on both the procedure and pending applications, Reuters stated.