01/11/2018: Biggest Stories in the Cryptosphere

by BlockEx

1. Hong Kong One Step Closer To Crypto Regulation

Two weeks ago, we reported on the Hong Kong Securities and Futures Commission (SFC) announcing it would look into potential crypto regulations to apply on the region. The regulator has now released a statement outlining a regulatory framework titled “guidance on regulatory standards”. Chief Executive Ashley Alder affirmed that the final goal is to establish a regulated environment where firms can do business with crypto. He went on to say that given how young this industry is, rules are not clear yet and this may lead to the proliferation of illicit practices. Companies with more than 10% of their holdings invested in cryptocurrency will fall under the new framework’s jurisdiction and will be given the possibility to develop products and services through a sandbox scheme. A licensing process requiring companies to release information regarding their business to the SFC will also be put in place.

2. Nasdaq Wants To Assist Crypto In Tackling Illicit Activities

Nasdaq released a paper today where it discussed its ability to help the crypto industry tackling the issue of fraud. The stock exchange affirmed that over the years it has worked on instruments able to fight “manipulation and other scams besieging digital coins” through the policing of markets such as securities and currencies. Illicit activities such as spoofing or insider trading are detected through a constant monitoring of activities carried out on exchanges. The tools caught the attention of several exchanges. In fact, Nasdaq has various clients interested in the licensing of its market-surveillance. Although the first exchanges started to arrive two years ago, it was last year that the demand became significant. It was due to Bitcoin’s price exponential growth. However, the stock exchange has decided to only accept companies that have been operating for a certain minimum of time and are reputable.

3. Morgan Stanley Defines Bitcoin As An Institutional Investment Class

Banking giant Morgan Stanley has updated its “Bitcoin Decrypted: A Brief Teach-In and Implications”. The findings were based on an investigation carried out by the research division. One of the main points was the fact that the number of institutional investors investing in crypto is growing while the number of retail ones is staying pretty much the same. The report also discussed the varying definitions of Bitcoin. According to the document, the cryptocurrency went from ‘digital cash’ to the answer to the financial system’s problems to an institutional investment class. The rise of concerns and findings in regards to Bitcoin has been reported as the driving force behind these changes. The statement is backed by the increasing number of financial institutions getting involved with cryptocurrencies. On the other hand, issues negatively affecting the growing industry were also mentioned. The three main problems perceived were a lack of: regulatory clarity, regulated custodians services and financial institutions of considerate size operating in the market.

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