The dramatic increase of retail and institutional investor interest in the crypto markets has resulted in an unavoidable need to reposition the current financial regulatory platforms to integrate regulation of digital asset markets. Since the existing Bitcoin surge is above $10,000 per bitcoin, it quite obvious that crypto markets have become easily accessible and significant to the public for supervisions to not intrude.
Currently, crypto markets are facing many crucial operational challenges, resulting in undermined investor confidence. Most recently, many significantly serious cybersecurity breaches, hackers infiltrating crypto markets and exchanges, have been widely reported on. Millions of dollars’ of virtual currency have also been stolen in recent years. Moreover, many crypto exchanges are reported to be involved in voracious and unreliable practices, insider abuses, and market manipulations.
According to recent research conducted by TIE, 75% of crypto exchanges are reporting doubtful volumes. Hong Kong and Singapore have introduced new licensing compliance with a requirement to acquire approval from regulatory before trading is permitted. The assessment covers an evaluation of an exchange monitoring system – which further includes market supervision for the identification of market abuse behavior, along with KYC (Know Your Customer), AML (Anti-Money Laundering), and CFT (Combating the Financing of Terrorism).
In Hong Kong, the Securities and Future Commission classifies ICOs as security, subject to the securities laws of the country. Cryptocurrency assets are treated no differently than any other regulated security assets. In Singapore, the Monetary Authority of Singapore (MAS) has issued several guidelines. These guidelines explain the ICO resembles capital market products’ regulation under the Securities and Future Act. Crypto platforms are subjected to a licensing acquiring regime and are limited to serve only accredited investors.
Similarly, other regions like China, South Korea, Taiwan, and the Philippines have issued different regulatory laws and guidelines for crypto exchanges and platforms. Some of them are comprehensively discussed in the following section