Hong Kong Considers Allowing Retail Investors to Trade Crypto, Removes ‘Professional Investor Only Requirement’ – Regulation Bitcoin News

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 regulating this industry … We think this might actually be a good time to really think carefully about whether we want to continue with this requirement for professional investors.”

SFC Director of 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), spoke about cryptocurrency regulation during a panel discussion held by Invest HK on Monday, the South China Morning Post reported.

She explained that the regulatory environment for crypto in Hong Kong is different than in mainland China. She emphasized that Hong Kong could introduce its own bill to regulate cryptocurrencies, stressing that it “shows how separate Hong Kong is from the mainland.”

The director confirmed that the SFC is currently considering allowing retail investors to “invest directly in virtual assets.” Over the past four years, the regulator has decided to limit 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 reported.

Noting that the crypto industry has become more compliant, the SFC director said:

We’ve had four years of experience regulating this industry … We think that this might actually be a good time to really think carefully about whether we want to continue with this requirement for professional investors.

The Hong Kong government has stepped up 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 offer crypto trading services and intend to offer trading in at least one security token can apply to the SFC for a license. “The licensee must only offer services to professional investors,” clarified the regulator. In December 2020, the SFC issued its first license to a digital asset trading platform. At the time of writing, OSL Digital Securities Ltd. the sole 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 the 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 invest directly in cryptocurrencies later this year, the director revealed, adding that Hong Kong will soon introduce a mandatory licensing requirement for crypto trading platforms.

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 of economics and cryptography.