Hong Kong allows private investors to trade crypto

Hong Kong allows retail investors to trade Bitcoin, Ethereum and other cryptocurrencies.

Hong Kong is positioning itself as a crypto hub

Amid the suppression of crypto in several leading economies, Hong Kong is taking the opportunity to increase its leadership position. The city’s crypto hub initiative is attracting global crypto exchanges and companies.

The Hong Kong Securities and Futures Commission (SFC) will announce at a press conference on May 23 that private investors will be able to trade cryptocurrency. However, according to the authorities, private investors will only be allowed to trade in the most reputable cryptocurrencies.

Hong Kong is taking a more progressive approach by establishing regulations and licensing for the crypto industry, while other countries such as China and the US are restricting cryptocurrency activity. The city plans to introduce a licensing regime for companies dealing with virtual assets in May, with planned access for private investors starting June 1.

Lennix Lai, CCO of crypto exchange OKX, said:

I expect that the conclusion of the consultation will reflect the opinion of the community. Namely, that safe, secure, and compliant retail is an important aspect of a robust virtual asset ecosystem.

A February document outlined a strategy to allow private investors to trade key virtual assets on exchanges licensed by the SFC.

In addition, investors are not allowed to trade cryptocurrencies that are not included in at least two investment indices from reputable providers, where at least one of these providers has experience in the traditional financial sector.

Crypto firms are moving to Hong Kong

While the challenges surrounding crypto regulation are still present, Hong Kong is pioneering its adoption. Major crypto exchanges, such as OKX and Huobi, are considering applying for licenses in Hong Kong.

HashKey and OSL are the only two SFC-licensed exchanges in Hong Kong to date. HashKey Group is planning a $100 to $200 million fundraiser at a business valuation of more than $1 billion.

Ripple has joined the e-HKD Pilot Program of the Hong Kong Monetary Authority (HKMA). It is envisaged that HKMA will become a specialized service conforming to the Hong Kong Virtual Asset Service Provider (VASP) regime.

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