Hong Kong SFC Considering New Crypto Exchange Regulations

The chairman of the Hong Kong SFC Carlson Tong Ka-Shing is considering new crypto exchange regulations to tighten the protection for investors and to keep a lid on the crypto industry in the city.

The Hong Kong Securities and Futures Commission (SFC) is continually searching for new and effective ways to curb rogue crypto operators and to improve ongoing crypto exchange regulations. The SFC had already issued warnings over the past few months to exchanges to get their affairs in order and abide by SFC rules while warning investors to be careful with the choices they make.

Harsh but Fair Crypto Exchange Regulations

As more financial regulatory bodies and watchdogs start to oversee the crypto-asset industry, Tong Ka-Shing thinks it is important to safeguard investors while ensuring that the local industry remains robust and most importantly, in line with the law.

Talking to the South China Morning Post, Tong Ka-Shing outlined some of the wishes of the SFC by saying:

We do not think imposing a total ban on these platforms is necessarily the right approach, and it will not work in today’s internet world when trading can cross national boundaries. Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.

It’s a smart move to recognize the international nature of the crypto world and that banning crypto-asset trading will not eradicate the problem, but will make it more complex for local and nationwide authorities to regulate.

"We Are Watching you!"

Attacking crypto exchange trading platforms seems like the logical place for the SFC to start. These exchanges are similar to traditional stock exchanges in many ways with centralized platforms generally operated by one group of people or a single organization. There are a handful of exchanges operating out of Hong Kong but very few are in line with current crypto exchange regulations.

Tong Ka-Shing will be handing over the reins to the SFC’s soon-to-be new chairman Tim Lui Tim-Lueng, which is expected to take place later this week. However, before leaving the post, Tong Ka-Shing warned unregulated crypto-asset exchange platforms in Hong Kong that:

We are watching you!

Although Tong Ka-Shing also pointed out that the SFC is restricted by technically only being able to regulate securities, they are keeping a keen eye on the industry. As the trading of crypto-assets and Bitcoin in Hong Kong goes through the roof, Tong Ka-Shing also mentioned that the SFC is biting at the bit to impose tighter crypto exchange regulations in the very near future.

Crypto Market-Maker Altonomy Receives $7 Million in Funding from Polychain Capital

Altonomy, a New York-based cryptoasset trading, advisory, and asset management company, has completed a $7 million fundraising round from Polychain Capital, a leading hedge fund and venture capital firm.

Co-founded by Ricky Li, a former Manager of Research and Product at the CME Group, Altonomy has also received funding from 7 Blocks.

Additional Capital Will Allow Altonomy to Have More Inventory

Commenting on how the additional capital could help Altonomy’s business operations, Li said: 

As a liquidity provider for altcoins, more funding will allow us to have more inventory, taking larger exposure and managing risk more effectively.

Li added that the extra funding would allow Altonomy’s trading desk to provide better services - as the platform would not need to “put constraints” on customers at settlement.

Funds May Be Used to “Source Liquidity for Customers”

Olaf Carlson-Wee, the Founder and CEO at Polychain Capital, remarked:

As a long-time user of Altonomy’s trading services, it was an easy decision for us to invest in their business when the opportunity became available.

Carlson-Wee, a former Product Manager and Head of Risk at Coinbase, also mentioned that the additional funding would help “source liquidity for customers, regardless of token type, order size, market cap, or whether the asset trades on centralized or decentralized exchanges.”

According to Coindesk, Li had suggested to investors in January 2019 that they “liquidate enough ETH so they would have at least two years of runway.” However, Li is now anticipating that cryptocurrency prices may continue to recover - after enduring a long bear market that lasted throughout 2018.

Altonomy Introduces Cloud Service for Crypto Mining

In addition to providing crypto trading and asset management services, Altonomy introduced a new product last year, called the AltMiner. According to Li, AltMiner’s cloud service allows Altonomy’s bigger investors to mine various cryptocurrencies.

Altonomy’s management claims that the AltMiner has a “superior return profile” with the “newest generation of miners, low electricity costs and a secure hosting site.”

During an interview with CryptoGlobe in May 2019, Lee explained how Altonomy’s crypto trading services were developed and their potential benefits.

One of Altonomy’s main services, called electronic execution, allows mining firms, investment companies and crypto exchanges to “enter and exit positions as an outsourced execution desk.”

As a high-frequency market-maker, Altonomy also provides liquidity for various tokens to several crypto spot and derivatives trading platforms.