Retail Crypto Investors in Hong Kong Will Soon Have Access to Services from Licenced Crypto Exchanges

On June 1, 2023, Hong Kong will allow regular investors to participate in cryptocurrency trading.

The financial regulator announced its proposal to enable licenced crypto exchanges to retail service investors in the country from May 23, 2023, citing 152 comments from industry participants, professional organisations, and advisory companies in support of the move.

If a DASP can show that it will adhere to the new rules, it will be permitted to seek a licence from the relevant authorities in Hong Kong. If a DASP does not intend to adhere to the SFC’s proposed guidelines, it will be forced to cease operations in the city.

Although the new rules won’t go into effect until June 1, 2023, they will cover important ground, such as the need for secure asset custody, the prevention of conflicts of interest, the separation of client assets, and the implementation of stringent cyber security measures.

Crypto exchanges including Huobi Global, OKEx, and have sought virtual assets service provider (VASP) licences from the government. Still, the authority has not yet approved any of them to provide their business products to individual investors.

If the applications are successful, the firms will be able to expand their user bases and solidify their positions in the crypto sector by tapping into the Hong Kong market.

Increasing market confidence and integrity, the SFC’s decision to enable authorised exchanges to operate in the nation is a significant development. This is an important step for Hong Kong as it strives to become a global leader in technology innovation and a global hub for the trading of digital assets.

The country’s financial authority is committed to enabling cryptocurrency trading platforms to function while also taking robust safeguards to protect investors in line with the feedback from the findings of the consultation paper issued in February.

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