Along with China and Indonesia, The Hong Kong government has launched steps to regulate local crypto exchanges. In the law, professional investors will be able to trade cryptocurrencies under a mandatory licence. The definition of a professional investor is also clarified as those who hold at least $1 million in their portfolio. A great proportion of investors seem to be excluded from the trading in Hong Kong if criteria is not changed.
Hong Kong’s Licence on Crypto Trading
Last November, the financial market’s regulator of the autonomous administrative region presented the proposal of this idea of licence. However, the proposal received backlashes immediately. The opposition led to industry consultation concerning the proposal. Yet, the deadline for the Hong Kong government and pro-crypto groups to decide on the proposal has arrived.
Hong Kong’s Financial Services and the Treasury Bureau (FSTB) announced that the consultation period had come to an end last Friday. The decision of the government remained as licensing all cryptocurrency exchanges operated under its jurisdiction. At the moment, crypto exchanges can become licensed entities if they choose to operate in Hong Kong. However, these decisions might be in change if the proposals can turn into laws. In such a case, the Jurisdiction’s financial regulator is expected to hold more power over the crypto market.
Consultation report points out the reason behind permission of professional traders in the market as guaranteeing protection for the investing public. In page 32 of their conclusion paper report, there should be a proper degree of security for the investors which can be provided by restricting the services of cryptomarket to professional investors solely.
Those who can currently trade in the market are also specified with further qualifications. Those professionals should have around HK $8 million referring to $1.03 million. The rest of the investors who may fail such criteria will be excluded.
Such exclusion harbours the possibility of pushing those small investors towards unregulated platforms. This issue had been raised during the consultation period as well. Particularly, an advocacy group of cryptocurrency exchanges attract attention to the cons of the licensing and restricting crypto market.
Other countries in Asia against Crypto Market
The Hong Kong government is not the only government implying restrictions or bans over cryptomarket. As mentioned above, China has a strong anti- crypto currency stance. Earlier, the country has banned all transactions in relation to crypto currencies. Any crypto-currency exchange has been treated as illegal. Again, Thailand proposed a set of rules restricting crypto trading and pushing an enormous group of traders outside of the market. However, the public opposition managed to force the government to withdraw their proposal.
Ultimately, India and Singapore are the next countries with regulations against cryptocurrency trading. India might prohibit the entire market within its jurisdiction while Singapore considers licenced retail services rather than total ban.
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