Cryptocurrency exchanges in Hong Kong are pushing against a forthcoming law, that would ban retail investors from trading cryptocurrencies.
Hong Kong’s Financial Services and the Treasury Bureau published a proposal in November 2020 to limit cryptocurrency trading to professional investors. Hong Kong’s security rules define professional investors as individuals with a portfolio of at least HK$8 million, or US$1 million.
After the initial two-month period for consultations with industry bodies and members of the public ended, the government said it planned on turning the proposal into a bill. The bill, according to the South China Morning Post, would be introduced to the city’s legislative council later this year.
Aside from banning retail investors from cryptocurrency trading, the bill also includes a proposal to expend due diligence on politically exposed persons to anywhere outside Hong Kong. The Financial Services and the Treasury Bureau said the proposal was part of the government’s efforts to comply with recommendations from the Financial Action Task Force (FATF).
Global Digital Finance — an industry group representing BitMEX, Huobi, OKCoin, and Coinbase — said the proposal will force retail investors to turn to unregulated platforms out of reach of the law. Malcolm Wright, the chairman of Global Digital Finance’s advisory council, said other FATF members have complied with recommendations without implementing measures like this.
“Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets,” he told the South China Morning Post.