Hong Kong to Present Crypto Regulation Rules

According to the new requirements, fund managers, whose portfolio contains more than 10% of assets in a cryptocurrency, must obtain a license from the SFC
01 November 2018   891

The Securities and Futures Commission of Hong Kong (SFC) has published rules for cryptocurrency funds. The regulator also said that it will probably control trading platforms, Bloomberg reportes.

According to the new requirements, fund managers, whose portfolio contains more than 10% of assets in a cryptocurrency, must obtain a license from the SFC.

It is noted that companies are entitled to apply for a license if they successfully pass the test in the sandbox.

The market for virtual assets is still very young and trading rules may not be transparent and fair. Outages are not uncommon as is market manipulation and abuse. And there are also, I am afraid, outright scandals and frauds.
 

Ashley Alder

Chief, SFC 

In addition, the new rules prohibit industry participants from providing customers with any financial incentives or offering them to trade in cryptocurrency futures or derivatives.

Realistically there are two possible ways forward -- regulate or ban -- and it’s a smart move that Hong Kong has chosen to regulate.
 

Urszula McCormack

Hong Kong-based partner, King & Wood Mallesons

There's no information on any mining regulation updates by SFC. It became known in October that the Commision is preparing rules for regulating cryptocurrency business in the country.

Buterin to Propose to Increase PoS-Validators Reward

According to Vitalik proposal, if PoS-validators, for example, validate 1,000,000 ETH, then the annual yield will be 18.1%
23 April 2019   90

The creator of Ethereum, Vitalik Buterin, published on GitHub a proposal on changing the reward scheme for validators after the transition of ETH to the Proof-of-Stake consensus mechanism (PoS).

According to the formula proposed by Buterin, if PoS-validators, for example, validate 1,000,000 ETH, then the annual yield will be 18.1%.

Buterin PoS Validators Reward Proposal
Buterin PoS Validators Reward Proposal

The more assets are fixed for validation, the lower the interest rate. So, 134 217 728 ETH will bring cryptoinvestors only 1.56% per annum. At the same time, the maximum annual emission volume will be 2,097,152 ETH.

Considering that the current volume of Ethereum's market offer is 105,777,585 ETH, this offer is focused on the medium and long term. Buterin also clarified that the profitability indicators are shown without taking into account proceeds from transaction fees. Consequently, the actual income of validators can be several percent higher than the values ​​indicated in the table.

According to Justin Drake, a researcher at the Ethereum Foundation, if after implementing PoS 32 million ETH will be allocated for stacking, the income of validators will be 3.2% per annum. At the same time, the annual emission indicator will be 1% (for comparison, the current indicator of Bitcoin inflation is 3.94%).

In this case, Drake notes that after the activation of EIP 1559 of the funds collected in the form of commissions, will be destroyed. Consequently, with an average gas consumption of each shard of 1000 ETH per year, inflation will drop to 0.5%.

Users left generally positive comments on the offer. However, some of them expressed fears that in the new conditions the exchange may receive significant advantages, which will be able to do stacking at the expense of clients.