• The Securities and Futures Commission (SFC) in Hong Kong proposed a licensing regime for cryptocurrency exchanges set to be put in place from June 2023.
• Under the proposal, individual retail investors would be allowed to trade larger crypto assets listed on crypto exchanges licensed by the SFC.
• The SFC proposed that only crypto exchanges licensed by its regulatory body should be allowed to serve investors as well as what guidelines should be put in place to provide a range of “robust investor protection measures.”
Hong Kong Securities and Futures Commission Proposes Licensing Regime for Crypto Exchanges
The Securities and Futures Commission (SFC) of Hong Kong has recently announced a proposal to put in place a licensing regime for cryptocurrency exchanges from June 2023. This order was disclosed in a consultation paper published on Monday about its newly proposed licensing regime for cryptocurrency exchanges.
Retail Investors To Trade Licensed Crypto Assets
As per the SFC in its consultation paper, individual retail investors would be allowed to trade larger crypto assets listed on crypto exchanges licensed by the SFC. Though the regulator did not reveal which crypto assets will be allowed for trading, Bitcoin and Ethereum are two among them with higher chances due to their large market cap.
Only Licensed Crypto Exchanges Will Serve Retail Investors
In addition to this, the paper also reflected on crypto exchanges where it is proposed that only those which have been licensed by the SFC should serve investors along with certain guidelines related to investor protection measures. Most of these measures have been drawn from existing guidelines from some of the region’s financial sectors.
Julia Leung’s Statement on Investor Protection Measures
Julia Leung, CEO of SFC said in a statement regarding this proposal: „Our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ’same business, same risks, same rules‘ principle.“ She further emphasized that these regulations are necessary so as to ensure investor safety while also facilitating innovation within Hong Kong’s cryptocurrency sector.
Hong Kong’s Goal of Becoming A Crypto Hub
Hong Kong is taking various steps towards becoming one of the world’s leading hubs for cryptocurrencies and blockchain technology since it first disclosed its goal last year. With such regulations being set up, it signals that regulators are keen on their respective aims towards this industry while also providing security towards individual retail traders at large scale through stringent policies and frameworks