Hong Kong’s Securities and Futures Commission (SFC) has reportedly made significant changes to one of its cryptocurrency regulations. The SFC has imposed strict criteria for regulatory clearance, granting approval to only two cryptocurrency exchanges in the region.
OSL, one of the approved exchanges, reports that the SFC has lowered the mandatory insurance coverage for digital assets to 50%.
Hong Kong SFC eases cryptocurrency insurance coverage rules
In a recent statement, OSL announced its commitment to maintaining high insurance rates for its assets despite recent reductions in requirements from regulators.
“OSL remains firm in its commitment to protect at least 95% of its regulated assets under management, and this decision follows new regulations allowing virtual asset service providers (VASPs) to reduce insurance coverage to 50% of their assets under management. “Despite the guidance, there is no change.”
We emphasized that our firm commitment to maintaining a significant level of insurance for consumers’ cryptocurrencies is a response to volatile markets. Additionally, numerous cryptocurrency companies have collapsed over the past few years.
Read more: 11 Best Altcoin Exchanges for Cryptocurrency Trading in January 2024
In particular, cryptocurrency exchange FTX saw billions of customer funds lost.
Insurance’s importance is demonstrated by the struggles victims of the FTX collapse faced to get their assets back.
The end of 2022 saw even billionaires suffer significant losses due to the cryptocurrency market crash, highlighting the need for strong insurance coverage.
According to data from Statista, the former CEO of cryptocurrency exchange Binance, Changpeng “CZ” Zhao will have a net worth of 820 million by the end of 2022 following the collapse of a series of cryptocurrency companies. decreased by billion dollars.
The statement said the exchange has implemented a two-year digital asset custody policy with Canopius.
Cryptocurrency holders prioritize digital asset insurance
Nicholas Edwards, head of Specie at Canopius, expressed approval of OSL’s goal of ensuring a secure platform.
“Our digital asset custody products provide an additional layer of customer protection and support OSL’s mission to maintain the integrity and security of digital assets in today’s evolving financial ecosystem.”
However, cryptocurrency users can also sign up for their own personal insurance outside of exchanges.
Read more: Crypto.com vs. Coinbase: Which cryptocurrency exchange is right for you?
Crypto Shield operates policies that protect owners against asset losses on major exchanges.
The insurance policy covers 20 cryptocurrencies, including Bitcoin, Ethereum, Ripple, Solana, and Dogecoin, as well as stablecoins such as Tether and USD Coin.
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