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Hong Kong Embraces Crypto Revolution: Retail Investors to Gain Access, Pending Final Approval

by BSC News

May 23, 2023

chain

The move is part of Hong Kong's strategy to position itself as a leading crypto hub, despite caution from other jurisdictions following the collapse of FTX.

Hong Kong Breaks New Ground

Hong Kong has announced that it will allow retail trading of cryptocurrencies starting in the latter half of this year. The Securities and Futures Commission (SFC) made the announcement on May 23, revealing that it will introduce a licensing regime for Virtual Assets Service Providers (VASPs) starting on June 1. This regime aims to create a regulatory framework that will foster responsible and secure trading of cryptocurrencies.

The decision comes as Hong Kong aims to position itself as a leading hub for the crypto market, even as other jurisdictions remain cautious following the collapse of FTX, a major cryptocurrency exchange, late last year. While the new guidelines will become effective in June 2023, the SFC has yet to approve any virtual asset trading platform to provide services to retail investors.

During the consultation period, the SFC received 152 written submissions from within the industry, indicating a keen interest in expanding retail access to cryptocurrencies. In order to ensure the protection of retail investors, the SFC has outlined a series of robust measures.

These measures include implementing good governance practices, ensuring suitability during the onboarding process, enhancing token due diligence, establishing admission criteria, and enforcing disclosure standards.

To rectify the current anomaly and revive Hong Kong's status as a prominent financial center, the SFC is granting permission for retail investors to trade Bitcoin (BTC) and other major tokens. Talks regarding this decision have been ongoing for some time, but the final approval is now imminent.

The news of Hong Kong's decision has already had a positive impact on cryptocurrency prices. Bitcoin ($BTC) saw a 1.3% rise, reaching $27,308.03, according to CoinMarketCap. Throughout May, Bitcoin has been trading within a narrow range, struggling to break significantly above the $30,000 mark but remaining above $25,000. Ethereum ($ETH), the second-largest cryptocurrency, experienced a gain of more than 1.69%, reaching $1,851.92.

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