The special administrative region of Hong Kong is slowly growing increasingly friendly to crypto startups with an impending proposal to enable retail investor trading to distinguish itself from mainland China.
Tight regulations in Hong Kong have historically prevented crypto platforms from extending services to retail traders, with the majority of retail traders relying on unlicensed exchanges to operate.
“Virtual assets have in the past year gone from peak to low(-price) levels,” said Julia Leung, the CEO of the Securities and Futures Commission (SFC) at the Asian Financial Forum in Hong Kong. “The good thing is that when the froth is taken out from the system as platforms and some tokens collapsed, it focuses investors and sellers’ minds on investor protection.”
Investor protection is paramount for Hong Kong authorities, who have been on a path to safeguard retail traders from the perils of crypto scams and NFT fraud in recent years.
Last year, Hong Kong’s SFC announced that NFTs or non-fungible tokens exposed investors to “heightened risks.”
“Investors should be mindful of these risks, and if they cannot fully understand them and bear the potential losses, they should not invest in NFTs,” the SFC said.
Over the past few months, Hong Kong cracked down on retail traders and said that only seasoned professional traders would be authorized to trade crypto in its jurisdictions to minimize risks to retail investors.
But now, Hong Kong regulators are issuing a call for crypto to take a “more solid footing” in their territory, a play to lure back crypto firms that vanished from Asia’s financial capital.
Hong Kong is running an NFT pilot program and testing a new central bank digital currency known as the e-HKD. Last year, the country’s central banking authority, the Hong Kong Monetary Authority, also announced plans to disclose a stablecoin and crypto regulatory framework, and asked the public to weigh in on eight questions related to crypto assets.
This week, however, the country said it would be receptive to mulling a crypto futures exchange-traded fund (ETF) and permitting licensed crypto exchanges to offer services to retail traders.
Be the first to comment