• Hong Kong is making moves to prioritize consumer protection in the crypto market by limiting retail investors to trade only “Highly Liquid” Crypto Assets.
• The Securities and Futures Commission (SFC) will issue a consultation paper later this quarter with more details on products and conditions for retail investors to trade in virtual assets.
• The SFC will also release guidelines for the licensing requirements for virtual asset exchanges.
Hong Kong is making significant moves to bring regulations to the crypto market, with a focus on consumer protection. At the Asia Financial Forum on Wednesday, Securities and Futures Commission (SFC) CEO Julia Leung Fung-yee revealed a plan to limit retail investors to only trading “Highly Liquid” Crypto Assets. This move is being made to ensure the safety of consumers in the market.
Leung further emphasized the limitation of allowing retail investors to only trade certain assets. “Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them. We will set the criteria that would allow retail investors to [only] trade in major virtual assets,” said Leung.
To provide more details on the products and conditions for retail investors to trade in virtual assets, the SFC will be issuing a consultation paper later this quarter. Alongside that, the SFC will also be releasing guidelines for the licensing requirements for virtual asset exchanges.
The crypto market can be both extremely profitable and risky, and Hong Kong is taking the necessary steps to ensure consumer protection. With retail investors only allowed to trade “Highly Liquid” Crypto Assets, the risks of investing in the crypto market are minimized, while still allowing investors to take advantage of the potential profits.