The director of licensing and head of the fintech unit of Hong Kong’s Securities and Futures Commission (SFC) has confirmed that the regulator is considering allowing retail investors to invest directly in crypto assets. “We’ve had four years of experience in regulating this industry … We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.”
SFC Director, Crypto Regulation in Hong Kong
Elizabeth Wong, director of licensing and head of the fintech unit of Hong Kong’s Securities and Futures Commission (SFC), talked about cryptocurrency regulation during a panel discussion held by Invest HK on Monday, South China Morning Post reported.
She said that crypto regulation in Hong Kong differs from mainland China. Emphasizing that Hong Kong can introduce its own bill to regulate cryptocurrencies, she stressed that it “shows just how separate Hong Kong is from the mainland.”
The director confirmed that the SFC is currently considering allowing retail investors to “directly invest into virtual assets.” Over the past four years, the regulator has taken the stance of limiting crypto trading on centralized exchanges to professional investors, which are individuals with at least HK$8 million (US$1 million) in liquid assets, the publication conveyed.
Director of SFC noted the increased compliance in the crypto sector.
We’ve had four years of experience in regulating this industry … We think that this may be actually a good time to really think carefully about whether we will continue with this professional investor-only requirement.
Hong Kong’s government has made greater efforts to attract back companies in fintech that have fled the city because of strict regulations.
The SFC created a regulatory framework in November 2019 for crypto trading platforms. The SFC may grant a license to centralized exchanges which provide crypto trading services or intend to trade at least one security token. “The licensee must only provide services to professional investors,” the regulator clarified. SFC was the first to issue a license for digital asset trading platforms in December 2020. At the time of writing, OSL Digital Securities Ltd. is the only licensee listed on the regulator’s website.
Wong also noted that some of the requirements for retail investors to be able to invest crypto assets have been relaxed by the SFC over the last year. The regulator is currently reviewing the rules to permit retail investors the opportunity to invest with ETFs (exchange-traded funds) that include crypto exposure.
According to the SFC director, public input will be sought on whether retail investors can invest directly in cryptocurrency later this year. He also revealed that Hong Kong is soon going to introduce mandatory licensing requirements for trading platforms.
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