- Crypto Exchanges in Hong Kong will allow services to only professional investors.
- FSTB has been consulting on proposed changes to the current “opt in” system.
- Investors must hold portfolios worth HK $8M to qualify for professional investor status.
Hong Kong-based crypto exchanges have to obtain licenses from the territory’s markets regulator. It also restricts their service offerings only to professional investors, according to the consultation published.
Since last year, the Financial Services and the Treasury Bureau (FSTB) has been consulting on proposed changes to the current “opt in” system. However, under which exchanges may apply to licensed by the Securities and Futures Commission, however under no obligation to do so.
Under Hong Kong law, investors must hold portfolios worth HK $8 million ($1.03 million) to qualify for professional investor status. More so, Hong Kong hosts a huge number of cryptocurrency exchanges, including some of the largest in the world.
Added to this, Regulators and governments in Asia have various attitudes to regulating cryptos and the exchanges on which they are traded. Under Singapore’s regime, crypto exchanges must be licensed but can consider retail investors as clients. Moreover, the crypto industry participants have resisted moves to protect exchanges from dealing with retail investors.
More so, adding that regulation created to do so could spark an exodus of crypto exchanges from the city and drive investors into unregulated markets. Furthermore, during the 2021-22 session of the city’s legislative assembly, the FSTB says it will propose legislation, according to a report by Reuters.
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