Speaking to South China Morning Post, Tong declared that it would be futile to issue a blanket ban on cryptocurrency trading given the global nature of the venture. Commenting on the issue, the outgoing SFC chairperson said:
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.
Tong’s sentiments are at odds with the status quo in mainland China where the country has elected to crack down massively on cryptocurrency trading along with ICOs. For Tong, a more nuanced but robust regulatory framework would serve all parties best.
Tong is due to hand over as head of the SFC to Tim Lui Tim-leung on Friday (October 19, 2018). Earlier in the year, a report by Hong Kong’s Financial Services and Treasury Bureau (FSTB) issued a report that said cryptocurrencies weren’t a viable option for organized crime.
For Tong, an effective regulatory environment requires an extension of the SFC’s mandate to cover the emerging digital asset class. According to him, the regulatory watchdog’s purview only covers securities. This limitation isn’t unique to Hong Kong alone as other jurisdictions face similar issues of applying securities law to monitor and control digital asset trading.