Hong Kong Mulls Letting Retail Investors Trade Crypto, Removing ‘Professional Investor-Only Requirement’

Hong Kong Mulls Letting Retail Investors Trade Crypto, Removing "Professional Investor-Only Requirement"

The director of licensing and head of the fintech unit of Hong Kong’s Securities and Futures Commission (SFC) has confirmed that the regulator is considering allowing retail investors to invest directly in crypto assets. “We’ve had four years of experience in regulating this industry … We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.” SFC Director on Crypto Regulation in Hong Kong

Elizabeth Wong, director of licensing and head of the fintech unit of Hong Kong’s Securities and Futures Commission (SFC), talked about cryptocurrency regulation during a panel discussion held by Invest HK on Monday, South China Morning Post reported.

She explained that the regulatory environment for crypto in Hong Kong is different from in mainland China. Emphasizing that Hong Kong can introduce its own bill to regulate cryptocurrencies, she stressed that it “shows just how separate Hong Kong is from the mainland.”

The director confirmed that the SFC is currently considering allowing retail investors to “directly invest into virtual assets.” Over the past four years, the regulator has taken the stance of limiting crypto trading on centralized exchanges to professional investors, which are individuals with at least HK$8 million (US$1 million) in liquid assets, the publication conveyed.

Noting that the crypto industry has become more compliant, the SFC director said: We’ve had four years of experience in regulating this industry … We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.

The government of Hong Kong has been increasing efforts to lure back fintech companies that left the city due to strict regulations.

The SFC introduced a regulatory framework for crypto trading platforms in November 2019. Centralized exchanges that provide crypto trading services and intend to offer trading of at least one security token may apply to the SFC for a license. “The licensee must only provide services to professional investors,” the regulator clarified. In December 2020, the SFC issued its first license to a digital asset trading platform. At the time of writing, OSL Digital Securities Ltd. is the only licensee listed on the regulator’s website.

Wong further noted that the SFC has relaxed some requirements to allow retail investors to invest in crypto assets over the past year and the regulator is also reviewing rules on whether to allow retail investors to invest in exchange-traded funds (ETFs) with crypto exposure.

The SFC will seek public comments on allowing retail investors to directly invest in cryptocurrencies later this year, the director revealed, adding that Hong Kong will soon introduce a mandatory licensing requirement for crypto trading platforms. Tags in this story Elizabeth Wong, Hong Kong, hong kong crypto, Hong Kong crypto ETF, Hong Kong crypto licensing, Hong Kong crypto regulations, hong kong cryptocurrency, Hong Kong cryptocurrency regulation, Hong Kong vs mainland China, mainland China crypto regulation, SFC

Do you think Hong Kong should allow retail investors to trade crypto? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Japan to Relax Cryptocurrency Listing Rules REGULATION | 2 hours ago South African Financial Sector Regulator Declares Crypto Assets a Financial Product REGULATION | 1 day ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleJPMorgan Hires Former Executive of Bankrupt Crypto Firm as Head of Digital Assets Regulatory Policy Next articleJapan to Relax Cryptocurrency Listing Rules Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand"

Fidelity Investments, one of the largest financial services firms with more than $11 trillion under administration, is launching exchange-traded funds (ETFs) focusing on the crypto ecosystem and the metaverse. "We continue to see demand, particularly from young investors, for access ... read more.Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Australia to List Bitcoin ETF After 4 Clearinghouse Participants Commit to Meet Stringent Margin Terms Iran to Increase Penalties for Unauthorized Cryptocurrency Mining