The Hong Kong Securities and Futures Commission (SFC) has reportedly made a significant change to one of its crypto regulations. The SFC has only granted approval to two crypto exchanges in the region so far, imposing rigorous criteria for regulatory clearance.

OSL, one of the approved exchanges, reports that the SFC has lowered the mandated insurance coverage on digital assets to 50%.

Hong Kong SFC Relaxes Rules on Crypto Insurance Coverage

In a recent statement, OSL announced its commitment to maintaining a high insurance ratio for assets, despite the recent reduction in requirements by the regulator.

“OSL is steadfast in its commitment to safeguarding at least 95% of regulated assets under custody, a decision that remains unchanged despite new regulatory guidelines permitting virtual asset service providers (VASPs) to reduce insurance coverage to 50% of assets under custody.”

It emphasized that its firm commitment to upholding a high level of insurance for consumers’ crypto is a response to the volatile market. Furthermore, the numerous cryptocurrency firms that have collapsed over the past few years.

Read more: 11 Best Altcoin Exchanges for Crypto Trading in January 2024

Notably, FTX, a cryptocurrency exchange, witnessed the loss of billions of customers’ funds.

Insurance proves its significance through the struggle faced by victims of the FTX collapse in reclaiming their assets.

The end of 2022 witnessed even billionaires experiencing substantial losses amid the crypto market collapse, highlighting the imperative need for robust insurance coverage.

According to data from Statista, former CEO of crypto exchange Binan

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Author: Ciaran Lyons

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