The Hong Kong’s Securities and Futures Commission (SFC) has decided to issue a new regulatory standard at the start of November 2018. According to its new regulation, crypto exchanges, platform operators and fund managers will be affected.
This will also affect a company called InVault, from Shanghai, which was launched in Hong Kong recently and will benefit from this new set of rules, which will work as a future conceptual framework for the regulation that will legislate over cryptos.
Hong Kong’s new guidelines affirm that crypto exchanges and asset holders will have to hold insurance for their assets to prevent the losses of any investor’s funds. You can have hot wallets and even the self-custody of your assets if they are insured.
With so many high-profile thefts happening in Asia now, this measure will now be very important for the development of the industry in the region. Exchanges that keep all their money in hot wallets will need 100% coverage by insurance, which means that they will have to look for specialized companies that offer these services and InVault is just the company for that.
According to our information, the SFC generally expects that the insurance policy of the companies will cover at least all the assets in hot storage. Not all of the assets in cold storage need to be insured, though.
InVault And How The Company Will Benefit From The New Legislation
At the moment, InVault holds about one million ETH in its custody. Most of the money is in mainland China and the company has announced that the first custody service that will be offered by the operator as soon as it enters the Hong Kong market will be focused on this.
This company is already backed by Matrix Partners China, a local venture capital fund. In Vault was able to get a trust license from the SFC that will allow it to fully automate its services in the region in December.
Kenneth Xu, the founder of InVault, has told the local media outlet South China Morning Post (SCMP) that he truly believes that trusted custodial services will be very important to provide a regulated conduit between the traditional financial space and the crypto world.
According to him, InVault is currently having important discussions with a number of insurers in order to provide all the coverage that is provided by the Hong Kong regulator to reduce all the risks.
With this brand new regulation, InVault will be highly benefitted. The company offers a regulated service that will be likely to get highly popular and this will bring in many clients from Singapore and Hong Kong.
The Monetary Authority of Singapore, which acts a local regulator for the country, has also revealed a new framework and regulation to deal with cryptocurrencies.
The Future of Crypto Custody Services
With this move from the companies, it is clear that cryptocurrency custody services are popular now and that they will help a lot to protect the clients from any chance that they have of losing their assets. This way, hacking and events like employees accessing cryptos and stealing them will be far less common in the future.
Both Hong Kong and Singapore are heavily interested in regulating its regions and in protecting investors and there is a fair chance that other regions might be influenced later by what is currently happening in these countries. Therefore, companies like InVault have a lot to gain with this chance in how the market works.