How Hong Kong’s landmark crypto decision can spur retail adoption
- Hong Kong’s securities regulator has announced that licensed crypto platforms will soon be able to serve retail investors.
- The regulator received 152 written submissions from the industry during the consultation period.
Hong Kong’s securities regulator has announced new plans to provide retail investors with access to virtual asset platforms as it expands access to cryptocurrency trading.
The Securities and Futures Commission (SFC) in Hong Kong said that licensed crypto platforms will soon be able to service ordinary retail investors. Operators of virtual asset trading platforms who are ready to comply with the SFC’s proposed guidelines should apply for a license.
The guidelines for virtual asset trading platforms will contain criteria such as asset custody safety criteria, client asset segregation, and cyber security standards.
The statement read:
“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.”
According to SFC CEO Julia Leung, setting clear regulator expectations is “critical” for creating a responsible and innovative development environment.
Application filed, but is Hong Kong ready?
The SFC stated that it will implement a “number of robust measures” to protect retail investors. Good governance, suitability during the onboarding process, and heightened token due diligence are among them, as are admission standards and disclosure.
While the guidelines will go into effect in June 2023, the SFC has yet to approve any virtual asset trading platform that would offer services to individual investors. During the consultation period, the SFC received 152 written submissions from the industry, according to the release.
According to the announcement, most virtual asset trading platforms available to the public are not currently regulated by the SFC.
It added that businesses who do not want to comply with the impending guidelines should plan for an “orderly closure” of their Hong Kong operations.
A Forex Suggest study published in July 2022 revealed Hong Kong’s position as the best-prepared country for widespread cryptocurrency adoption, with a crypto-readiness score of 8.6.