After months of intense speculation about a likely prohibition, Hong Kong regulators have moved to ban retail trading in Hong Kong.
The Financial Services and the Treasury Bureau of Hong Kong has released the results of its consultation on a possible retail crypto trading ban, which began back in November 2020, according to Reuters on Friday.
While restricting trading only to qualified investors and as part of its conclusion, Hong Kong’s FSTB called for a comprehensive licensing regime. Only individuals with portfolios worth 8 million Hong Kong dollars (about $1 million) qualify as professional investors, according to Hong Kong Law.
In the early stages of the comprehensive crypto licensing regime, at least for the FSTB, the retail crypto trading ban is necessary. To facilitate the passage of the proposal into law, the FSTB reportedly plans to present its conclusions before legislators in Hong Kong.
If passed, the proposed licensing regime will also replace the current opt-in paradigm for crypto exchanges in the city.
By limiting crypto trading in Hong Kong to persons with portfolios worth at least $1 million, the FSTB is potentially excluding up to 93% of the city’s population from gaining access to cryptocurrencies.
Several stakeholders in Hong Kong’s vibrant crypto industry have expressed their dissatisfaction with the plan in the past, arguing that the move was inimical to the government’s goal of encouraging financial innovation.
Back in November 2020, the SFC announced a proposal to expand its crypto oversight responsibilities beyond security tokens to cover all digital asset service providers.