After last year’s market crash, Hong Kong implemented new rules on Thursday, permitting retail service customers to trade from licensed cryptocurrency exchanges.
The Chinese finance sector is expecting the global regulators to settle ground rules for crypto after the FTX case which led the US to smash the sector that is worth more than $1 trillion.
Since 2021, China has put a strict ban on crypto trading. However, Hong Kong, which has its own separate legal framework, has allowed trading.
Reports state that after a year all crypto exchanges in Hong Kong need to be licensed and can allow trading for retail clients. The regulatory authorities have already been launched last Thursday which led to the assumption being procured.
“(The sector) fundamentally is going to stay despite all the risks… These activities have to be allowed in a regulated way,” the city’s financial services and treasury chief Christopher Hui told AFP.
Hong Kong state regulators stated last Thursday that it had “already received a handful of applications” and that the market was “generally supportive” of the regime.
The new rules highlight investor protection measures such as an exchange’s need to evaluate their clients and curb their risk exposure. Also, regulating trade in ‘large-cap’ tokens like bitcoin.
On the contrary, Singapore, the regional rival of China and Hong Kong, is moving in the opposite direction as their agenda is to restrict retail involvement in crypto.
Crypto exchange OKX—which was founded in China but is now based in Seychelles—told AFP it was “committed to the Hong Kong market” and will apply for a license.
“Hong Kong is making concrete strides and is building confidence among industry players,” said Lennix Lai, OKX’s global chief commercial officer.
Regulators said they hope to move quickly to issue the first licenses.
According to Etelka Bogardi, a partner at Norton Rose Fulbright, articulating that some crypto firms are facing trouble in obtaining the benefits of traditional banking services or hiring corporate specialists which has been made mandatory.
The Hong Kong market is facing some hindrances even after appealing for a case of stablecoin offerings, crypto derivatives, and staking products. It means that retail investors are curbed from participating in spot trading.
- Published By Team Hongkong Journalist