Hong Kong will this year remove restrictions preventing retail investors from accessing cryptocurrency and digital asset trading in the region.
The authorities of Hong Kong to give retail investors the green light to access cryptocurrencies and digital assets from June, when it comes into force amendment approved to the law against money laundering and the financing of terrorism.
The new amendment, which was published in the Official Gazette of the Legislative Council of Hong Kong in June 2022, authorizes retail investors to access a market that had until now been reserved only for professional investors, whose capital exceeded at least HK$8 million or approximately US$1,03 million in bankable assets.
Robert Lui, Digital Assets Leader at Deloitte in Hong Kong, said the region, which is one of the world's leading financial centers, is creating a healthy regulatory environment for the development of cryptocurrencies as part of its plans to establish itself as a leading hub for international financial innovation and development.
Despite the uncertainty that the collapse of FTX caused in the crypto industry, Hong Kong authorities consider that Cryptocurrencies are here to stay and these digital assets will be part of the financial system of the future. In addition to this, opening up the cryptocurrency market to retail investors will unlock new opportunities and minimize the use of unregulated platforms by investors seeking exposure to crypto assets in the region.
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As a result of the newly approved amendment, financial services companies, providers and fund managers in Hong Kong are seeking advice on the requirements they must meet in order to offer cryptocurrency and digital asset services to their clients.
Lui noted that these companies and fund managers are interested in obtaining a license from the Hong Kong Securities and Futures Commission (SFC), in order to Open up investment and trading of large-cap digital assets to its clients and retail investors.
So far, the South China Morning Post reports, the SFC has authorized only two companies, Victory Securities and Interactive Brokers, to provide cryptocurrency financial services to professional clients locally.
Licensing requirements for financial services providers in Hong Kong
Currently, while financial service providers offering their clients access to crypto-asset futures trading via exchange-traded funds on the Hong Kong Stock Exchange do not need to hold a virtual asset license, those that will provide crypto-asset trading and dealing services directly in the spot market will need to hold a license issued by the SCF for this purpose, Lui noted.
Deloitte's digital asset expert also said that service providers must have trained personnel with knowledge of the crypto world; in addition, they must demonstrate to the financial regulator that they have the necessary internal controls to ensure safe custody of their clients' digital assets.
Financial service providers and fund managers wishing to deal in cryptocurrencies in Hong Kong must also show the SFC insurance arrangements to safeguard the interests and integrity of their clients, Lui said.
In October, former BitMEX CEO Arthur Hayes published an opinion piece noting that the tweaks and new regulatory framework that Hong Kong is implementing around the crypto industry could be key to seeing cryptocurrencies recover. return to China.
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