Hong Kong’s securities authority wants to let ordinary investors participate directly in virtual assets and reevaluate existing crypto trading rules.
Hong Kong is implementing numerous regulatory efforts relating to the cryptocurrency business in an effort to restore its standing as a worldwide cryptocurrency powerhouse.
Hong Kong, a city and special administrative area of China is eager to differentiate its approach to cryptocurrency regulation from the blanket prohibition in mainland China.
According to Elizabeth Wong, head of the Securities and Futures Commission’s fintech office, the Hong Kong government is contemplating presenting a law to regulate cryptocurrencies in a manner independent of China.
The South China Morning Post reported on October 17 that one of the SFC’s efforts allows regular investors to “directly engage in virtual assets,” as stated by Wong at a panel discussion hosted by InvestHK.
Wong observed that such an endeavour would be a substantial departure from the SFC’s position over the previous four years, which limits crypto trading on centralized exchanges to institutional investors. Individuals having a portfolio worth at least $1 million, or about 7% of the city’s population as of September 2021, are eligible investors.
Wong noted that the crypto business has been more compliant during the previous four years, stating: We believe that now is a good moment to seriously consider whether or not to continue requiring only professional investors.
The SFC representative also cited a few other regulatory steps aimed at encouraging the growth of the crypto ecosystem in Hong Kong, such as a January regulation allowing service providers to offer certain crypto-related derivatives. Wong stated that the regulator has also been considering allowing ordinary investors to participate in crypto-related exchange-traded funds.
Hong Kong launched a $3.8 billion fund on October 19 to bring international firms back to the city after a large talent drain caused by severe lockdowns and a contentious political atmosphere.