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- Bitcoin trades in Hong Kong will be limited to professional traders if the latest proposal to impose a ban on retail crypto trading approved by the legislators
- The ban will exclude 93% of the population from accessing crypto assets
- The Hong Kong government is planning to allow SFC to withdraw licenses of already authorized digital assets exchanges at will
Bitcoin has faced mainstream adoption in recent months and now has begun to experience regulatory scrutiny globally. In recent developments, a report published by the news-outlet Reuters revealed that Hong Kong regulators are planning to ban the flagship crypto asset for retail traders. Hence, the fact concludes that only millionaires in the country will be able to trade such assets. However, the Financial Services and the Treasury Bureau (FSTB) of Hong Kong has proposed such a ban. Now it depends on the city’s legislature whether they will pass such a proposal.
FSTB calls for a comprehensive licensing regime
According to the report published by Reuters, it is revealed that the FSTB has released the results of its consultation on a possible retail crypto trading ban. Hong Kong’s regulatory enforcement has concluded with a call for a comprehensive licensing regime for digital assets exchanges. Moreover, they asked to allow trading for cryptocurrency for only qualified investors in the country.
Following the Hong Kong laws, it was revealed that only investors with a portfolio worth 8 million Hong Kong dollars ($1 million) are qualified as professional investors. And such professional investors will only be allowed to trade cryptos.
Why FSTB plans to ban retail Bitcoin trades?
According to the regulatory body, the retail Bitcoin trading ban is necessary, at least in the early stages of a comprehensive crypto licensing regime. Simultaneously, the regulatory authority is planning to present conclusions before legislators in the country to facilitate the proposal’s passage into law. If the proposals receive the legislators’ approval, the licensing regime will also replace the current opt-in paradigm for crypto exchanges in the region.
Stakeholders are dissatisfied by FSTB’s stance
Following the stance of FSTB, it is observed that 93% of the residents of Hong Kong will be unable to access crypto assets. Following such a scenario in the country, several stakeholders in Hong Kong’s cryptocurrency industry are observed to be dissatisfied. According to many experts in the region, the step seems hostile to the regulator’s goal of encouraging financial innovation.
SFC would receive the power to exercise the right
On one side, the FSTB has proposed to ban Bitcoin trades for retail investors. On the other side, the government plans to empower the Securities and Futures Commission (SFC) to withdraw the authorized licenses. On Friday, a tweet from the news outlet 8BTC revealed that the regulator might soon be given the power to withdraw the licenses of cryptocurrency exchanges at will.
