The licensing director and head of the fintech unit at the Hong Kong Securities and Futures Commission (SFC) has confirmed that the regulator is considering allowing retail investors to invest directly in crypto assets. “We have had four years of experience regulating this industry… We think this may be a good time to think carefully about whether we will continue with this professional investor only requirement.”
SFC Director on Crypto Regulation in Hong Kong
Elizabeth Wong, director of licensing and head of the fintech unit at the Hong Kong Securities and Futures Commission (SFC), spoke about crypto regulation during a roundtable discussion hosted by Invest HK on Monday, the South China Morning Post reported.
He explained that the regulatory environment for cryptocurrencies in Hong Kong is different from mainland China. Emphasizing that Hong Kong can introduce its own bill to regulate cryptocurrencies, he stressed 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 taken a stance of limiting cryptocurrency trading on centralized exchanges to professional investors, who are people with at least HK$8 million (US$1 million) in liquid assets, according to the post.
Noting that the crypto industry has become more compliant, the director of SFC said:
We’ve had four years of experience regulating this industry… We think this may be a good time to think carefully about whether we’re going to continue with this professional investor-only requirement.
The Hong Kong government has been ramping up efforts to lure back fintech companies that have left the city due to strict regulations.
The SFC introduced a regulatory framework for cryptocurrency trading platforms in November 2019. Centralized exchanges that provide cryptocurrency trading services and intend to offer transactions of at least one security token can apply to the SFC for a license. “The licensee must only provide services to professional investors,” the regulator clarified. In December 2020, the SFC issued its first license for a digital asset trading platform. At the time of writing, OSL Digital Securities Ltd. is the only 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 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 crypto later this year, the director revealed, adding that Hong Kong will soon introduce a compulsory license requirement for crypto trading platforms.
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