Hong Kong Soon To Allow Retail Investors Gain Access to Crypto Exchange and Trade Bitcoin and Ether
In a recent development earlier today May 23, the Hong Kong Securities and Futures Commission (SFC) announced that it will allow retail investors to trade digital assets on licensed crypto trading platforms.
The top securities regulator said that operators of crypto trading platforms that are willing to comply with SFC’s proposed guidelines are welcome to apply for a license. These guidelines for crypto trading platforms include cybersecurity standards, asset custody safety requirements, as well as the segregation of client assets, apart from other things.
As we know, Hong Kong has been at the forefront of revamping its crypto market and is looking to establish itself as the crypto hub of Asia. Over the last few months, the regulators have initiated measures to make it easy for different crypto companies to set up base and continue their operations.
Speaking on the recent development, SFC CEO Julia Leung said that it is “key” to provide clear regulatory expectations to industry players thereby creating a responsible an innovative development environment. She added: ““Providing clear regulatory expectations is the key to fostering responsible development. Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks.”
Furthermore, the SFC plans to introduce several strong measures aimed at safeguarding retail investors, including enforcing good governance practices, ensuring suitability during the onboarding process, conducting thorough token due diligence, implementing admission criteria, and promoting transparency through disclosure.
The guidelines shall become effective next month onwards from June 2023. However, the SFC has yet to approve any crypto trading platform for offering its services to retail investors. As per the announcement, the SFC has received over 152 written submissions from within the industry during the consultation period.
The announcement emphasized that the majority of publicly accessible virtual asset trading platforms currently lack regulation by the SFC. It further stated that those who choose not to adhere to the forthcoming guidelines should prepare for a systematic cessation of business operations in Hong Kong.
The securities regulator of Hong Kong also stated that it will its efforts with the Investor and Financial Education Council and warn crypto investors about the risks of trading on unregistered platforms.