Hong Kong’s outgoing regulatory chairman has officially ruled out a total ban on cryptocurrency exchanges, like the one that was placed on the industry by the Chinese government several years ago.

While speaking to the South China Morning Post, Carlson Tong Ka-shing, the outgoing chairman of Hong Kong’s Securities and Futures Commission (SFC), explained that although the government wants to regulate the cryptocurrency industry, they have no plans to restrict, or ban it, by blocking citizen’s access to exchanges.

He also explained that banning citizens from trading cryptocurrency is highly ineffective due to multiple methods of circumventing government restrictions that exist, like Virtual Private Networks (VPNs).

“We do not think imposing a total ban on these platforms is necessarily the right approach. Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”

He added that although the SFC does not want to ban cryptocurrency trading, they are planning on implementing a thorough regulatory framework that offers better protections for cryptocurrency investors against fraud.

Because cryptocurrency falls into a gray space of regulatory jurisdiction, the SFC will be the group to regulate it, even if many cryptocurrencies aren’t defined as securities. And, despite many of the cryptocurrencies themselves not being securities, he explained that they will first look at regulating the platforms they are exchanged on.

“We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected,” he explained.

This method of regulation is welcomed by cryptocurrency exchanges, with multiple Hong Kong-based platforms, like Circle and BitMEX, telling the SFC that they support this type of regulation.

Regulating the cryptocurrency industry by regulating the industries’ exchange platforms is becoming an increasingly popular way of confronting the issue of regulation. Japan’s regulatory authority, the FSA, recently took similar actions, requiring exchanges to receive licensing and by subjecting aspiring exchanges to increased regulatory scrutiny.