For the second straight day running, Bitcoin price action sees some slight tepidness, and continues to trade in a narrow range, keeping within the boundaries of USD 9,397 and USD 9,219, barely in a 2% range.

So far, Asian traders have also kept up with their trend of profit taking, ensuring any gains met in the past half day of trading are eaten up, but still without enough volume to make a real difference.

Right now, as of 10:00 London time, Bitcoin is in strict consolidation mode, trading at USD 9,249 (Coindesk).

We talked yesterday in two separate reports about blockchain and crypto news from China, with the state thinking of rescinding its ban of Bitcoin mining, and the Hong Kong government (still a Chinese special territory) outlining new regulations for crypto exchanges.

The move has already brought some initial responses from the crypto exchanges expected to feel the effects of these new laws. Atom Group, based in Hong Kong and running a Bitcoin spot and derivatives exchange might count themselves slightly unlucky to have launched just as the regulatory regime tightens.

Today, the South China Morning Post (SCMP) covered the launch of the Atom Asset Exchange (AAX), notable for its use of the Millenium Exchange matching engine — the same tool developed by the London Stock Exchange to deliver low trade latency and improve data transparency for potential clients.

However, with the previous day’s news from Hong Kong’s securities watchdog, the Securities and Futures Commission (SFC), it appears that AAX will also fall under its remit, as SFC is also now regulating derivatives.

Since any and all cryptocurrency trading related to securities or futures, as AAX plans, is now a regulated activity under the purview of the SFC, this means that licensing will most likely be required before it can proceed. Founding partner of crypto investment company Primitive Ventures Dovey Wan believes that the only other alternative is to gain an exemption, a move typical to instruments that cannot fulfill all regulator requirements. She explains:

“Hong Kong hosts dozens of virtual asset trading platforms which pose serious investor protection concerns. A number of these may decide not to seek an SFC license under the new regulatory framework. This is a course of action which is open to them simply by ensuring that no virtual asset traded on their platforms is a ‘security’ or ‘futures contract.’”

AAX CEO Thor Chan has already told SCMP that he doesn’t believe AAX should fall under SFC purview, but that the exchange would seek Asian licensing and work closely with the new guidance:

“Under the framework proposed by the SFC, I believe that part of the market will remain unregulated for a while… We welcome the SFC’s latest guidance. AAX has always envisaged operating in regulated markets for cryptocurrencies that encourage innovation but that also provide investor protections. We see the SFC’s announcement as an important step in that direction.”

Meanwhile, on the other side of the world in Russia, local media outlet RBC has reported that the Russian state is in the midst of developing new laws that would allow the government to confiscate Bitcoin.

The details are not very clear currently, but the new laws do not distinguish any particular crypto, referring to “digital assets” and including crypto as a major part of that category. A Russian parliament dedicated committee head, Nikita Kulikov, was quoted as saying:

“The constant growth trend in crimes using virtual assets, and the lack of consumer protection in the face of this kind of criminal onslaught, naturally dictate the need to develop mechanisms for legal regulation and control of virtual asset exchange.”

It sounds typically draconian from Russia to take control of something even as decentralized as Bitcoin, and as some people are pointing out on social media, it would be impossible for anyone to confiscate funds if they were strictly under the control of people keeping their own personal wallets and private keys.

However, since the law appears to be targeting criminals and scams, it could be that they would apprehend perpetrators. And RBC notes also that in theory, exchanges could be accessed if the exchange in question complies. But for individual wallets, could the state perhaps force them to give up private keys? The Federation should be pretty capable of that!

 

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