Hong Kong Set to Lift the Crypto Trading Ban for Retailers
The Hong Kong Securities and Futures Commission (SFC) has revealed plans to eliminate the crypto trading prohibition for retail customers. A statement issued by SFC on February 20 disclosed that the regulators have agreed to ease crypto regulations for retail traders. In 2021 Hong Kong adopted unfriendly crypto laws that restricted retail investors from engaging in crypto activities.
The SFC decision on crypto obliged the legislators to amend the digital laws to match with the emerging digital economies. The changes in the legal system mandate crypto lenders and exchanges to comply with SFC requirements before June next year.
Hong Kong Amends Crypto Regulation
A February 20 SFC report revealed plans for the regulators to formulate crypto-friendly laws in Kong Kong. The collapse of the Bahamian crypto exchange obliged the SFC regulators to formulate stringent crypto regulations to mitigate unregulated transactions in the country.
The restriction created mixed reactions between the legislators and regulators, leading to prolonged debates and consultations.Based on the February 20 SFC report, the regulators have demanded the crypto firms in Hong Kong seek license approval before June of the next trading year. The regulators announced plans to take legal action against non-compliant firms.
Notably, the amendment of crypto laws in Hong Kong has inspired crypto firms to pursue the country’s market.
The Seychell-based crypto exchange Huobi leads other firms to enter Hong Kong. A recent statement issued by the Huobi chief executive, Justin Sun, disclosed that the crypto firm will soon create an online portal to register for SFC licensing.
Hong Kong Next Move
Despite easing the crypto ban, Hong Kong is prioritizing becoming the first crypto hub in Asia. The interesting move inspired the legislators to deploy their human and financial resources in formulating new crypto licensing laws.
Remarkably, the Hong Kong central bank recently issued the first-ever crypto green bond. After the launch of the green bond the tokenized asset generated $100M that will be used to develop clean energy and adopt emerging technologies.
The regulators anticipate implementing new licensing regulations for crypto exchanges and lending platforms in June. The SFC report considers crypto assets as high risk investment, obliging the regulators to formulate policies that safeguard the investors’ interest amid the market recovery. The regulators confirmed to engage in further dialogues on crypto regulation till March 31.
Features of the Consultation Report
In the meantime, Hong Kong has legalized retail entrepreneurs to transact using the leading crypto assets by market capitalization, including Bitcoin (BTC) and Ethereum (ETH), among others.
A recent post by SFC unveiled the consultation document that outlines the crypto asset requirement and market conditions that mandates crypto providers to comply.
In addition, the consultation report has tasked the virtual service providers to develop a suitable crypto derivative asset. Also, it obliges the providers to furnish a detailed report for the investors illustrating the investment’s benefits, importance and risks.
Furthermore, Hong Kong extended the crypto derivatives ban though the regulators remain optimistic of its lifting. In particular, the ongoing amendment of regulation would ultimately terminate the prohibition.
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