The Hong Kong government is pushing forward a legislative proposal to ban retail investors from trading crypto and require all virtual assets trading platforms to obtain licenses to operate in the territory — a prospect that crypto industry insiders say will cause Hong Kong to lose competitiveness in the crypto space.
The legislative proposal, introduced by Hong Kong’s Financial Services and Treasury Bureau in November last year, recently completed a three-month consultation with the industry and members of the public. The proposal will now turn into a bill and possibly become law later this year.
The proposed law would require virtual assets services providers — including crypto exchanges, custody services providers and virtual assets financing services — to apply for a license from the Securities and Futures Commission (SFC). It also would require all virtual assets service providers who want to apply for the SFC license should serve “professional investors only.”
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Industry insiders say that the proposed restrictions on crypto trading, if it becomes law, could make companies and fintech talent lose interest in Hong Kong and move to more crypto regulation-friendly shores.
“The industry is still in its early stage of development and regulators should allow more open space for innovation and entrepreneurship,” said Flex Yang, CEO at Babel Finance, a Hong Kong-based crypto asset management firm, told Forkast.News. “Limiting crypto trading opportunities only to professional investors risks losing market competitiveness for Hong Kong in comparison to