A Hong Kong regulator proposed easing restrictions prohibiting retail investors from purchasing crypto tokens from licenced platforms.
The prohibition was the subject of debate in the city’s legislature, with lawmakers urging the regulator to relax the rules because investors were already using offshore and unregulated platforms like FTX to place trades.
The regulator also announced that by June 2024, all crypto trading platforms in Hong Kong must be approved by the Securities and Futures Commission or cease operations. In a new consultation, the SFC suggested that it “will not hesitate to take enforcement action.”
Advisor Justin Sun confirmed that crypto exchange Huobi will establish a new platform to apply for the SFC’s licence.
The government has pushed for changes to the city’s crypto licencing rules, with officials eager to position Hong Kong as a digital asset financial hub. Only last week did the city’s central bank issue the world’s first tokenized green bond, raising approximately $100 million to invest in clean energy technology and related projects.
Hong Kong enacted new mandatory licencing requirements for centralised crypto service providers on June 1st of this year. Monday, the SFC stated that it was seeking “a better balance between investor protection and market development.”
The deadline for industry and expert input on the new policies is March 31.
Additionally, the regulator suggested that only the largest tokens would be available to retail traders. The consultation addresses token admission requirements and specifies that “eligible large-cap virtual assets” must meet certain market criteria established by at least two independent index providers.
The regulator also requested that exchanges explain which crypto derivatives they intend to offer investors and why. Currently, licenced exchanges in the city are not permitted to sell crypto derivatives, a restriction the regulator has indicated it may alter.
