The Hong Kong government has published a proposal today that will limit cryptocurrency exchanges to experienced traders only. With cryptocurrency markets still reeling from the recent price plunge and other bad news, this latest proposed regulation could further damage crypto investment.
In breaking news published by Reuters, it was announced that the Hong Kong Financial Services and Treasury Bureau intends to put new legislation forward in the upcoming city legislative assembly.
The legislation proposes that all Hong Kong cryptocurrency exchanges will only be able to provide services to professional investors. Given the recent bearish move for Bitcoin and the cryptocurrency market, this news is certainly not favourable.
Currently, Hong Kong law stipulates that a professional investor is classed as an individual with a portfolio of HK$8 million, which equates to $1.03 million. A figure that is likely to reduce cryptocurrency trading to a rather small and select group.
Many cryptocurrency exchanges operate in Hong Kong, some of them are among the largest globally. Cryptocurrency is also very much more adopted in Asia than it is elsewhere, so investors in the region will be extremely concerned.
The Financial Services and Treasury Bureau (FSTB) has been sounding out the market over the last year before coming to their conclusions. It said today that all cryptocurrency exchanges that operate in the Hong Kong jurisdiction will have to be licensed, which hasn’t been the case up till now, with exchanges being allowed to choose to be licensed or not.
Voices from the crypto and technology sectors are being raised against the proposed regulation, with some saying that preventing retail investors from trading cryptocurrencies will likely push exchanges out of Hong Kong and into other jurisdictions where their wealth making will be appreciated, to say nothing of forcing retail investors underground to trade on unregulated and perhaps nefarious exchanges.
The blow comes on top of the recent Chinese government announcement that banned all payments in the country via the means of cryptocurrencies. This announcement probably had an effect on the recent crypto market plunge.
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