Hong Kong has pushed forward with plans to let retail traders commerce cryptocurrencies because it vies with Singapore for supremacy as a digital belongings hub.
Underneath plans launched on Monday by the Hong Kong Securities and Futures Fee, the business’s two largest crypto tokens — bitcoin and ether — can be opened as much as retail prospects, and licensed exchanges can be required to make sure shoppers have “ample data of digital belongings” earlier than they’re allowed to commerce. All digital asset buying and selling platforms working in Hong Kong or actively advertising and marketing to Hong Kong traders would have to be licensed by the SFC.
The proposals, which is able to first be topic to a six-week session with “ events”, would additionally require that not more than 2 per cent of shopper funds be saved in “sizzling wallets”, a time period used to explain on-line accounts seen as susceptible to hacks or phishing scams as a result of their keys are saved on-line.
Granting retail traders — who till now have needed to commerce crypto belongings on unlicensed exchanges — entry to licensed platforms would mark a giant step up in efforts to draw crypto companies to Hong Kong. The territory has in recent times been left behind by rival Singapore, which has allowed retail buying and selling however has been stung by a number of high-profile crypto controversies, together with final 12 months’s collapse of the dollar-pegged token terraUSD.
Singapore-based crypto hedge fund Three Arrows collapsed in June final 12 months, whereas a global manhunt for Do Kwon — co-founder of the corporate behind terraUSD — shone a global highlight on the city-state.
“This sends a strong message that Hong Kong needs to reclaim its standing as a worldwide crypto hub,” mentioned Henri Arslanian, managing accomplice at crypto asset administration agency 9 Blocks Capital Administration.
“Many giant crypto corporations had problem working out of Hong Kong in recent times, particularly because of the Covid journey restrictions. This session will add to the renewed momentum that the town is seeing,” he added.
The crypto business is searching for to rebound after a 12 months outlined by plummeting costs, hundreds of job cuts and a disaster of confidence that led to the collapse of a number of high-profile corporations, together with crypto trade FTX, which was established in Hong Kong earlier than shifting to the Bahamas.
“In gentle of current turmoil and the collapse of some main crypto buying and selling platforms all over the world, there’s clear consensus amongst regulators globally for regulation within the digital asset house to make sure traders are adequately protected and key dangers are successfully managed,” mentioned SFC chief govt Julia Leung.
Extra reporting by Chan Ho-him
