The majority of individuals are aware that the cryptocurrency market can result in significant losses quickly as well as quick rewards. Knowing this, organizations and businesses attempting to implement this technology are required to keep the safety of their customers in mind.
According to the news of the day, Hong Kong is implementing a strategy to give priority to consumer rights by restricting individual investors to only trade “Highly Liquid” Crypto Assets. On January 11, this information was made public during the Asia Financial Forum.
Hong Kong Will Compile A List Of Crypto Assets For Retail Investors
According to Julia Leung Fung-yee, CEO of the Securities and Futures Commission (SFC), Hong Kong regulators are taking substantial steps to bring crypto to the territory. To enable retail investors to trade only “highly liquid” assets with a licensing law, it includes shortlisting cryptocurrency assets.
Leung also mentioned that the SFC will publish a discussion paper later this quarter with further information on the products and requirements for individual investors to trade in assets. Leung made these remarks on Wednesday at the Asia Financial Forum. The SFC will also publish guidelines for the licensing requirements for exchanges of virtual assets concurrently.
Leung noted the drawback of only allowing individual investors to exchange a limited number of assets. “Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them. We will set the criteria that would allow retail investors to [only] trade in major virtual assets,” noted Leung.
Leung omitted providing a list of the specific digital currencies that will be included in the shortlist of crypto tokens for retail. The top 10 or 20 most liquidity digital assets, according to Robert Lui, technology platform head at Deloitte Hong Kong, may be chosen by the SFC for trading by individual investors.
Hong Kong Wants To Regulate Cryptocurrencies
The SFC also intends to regulate cryptocurrency trading as part of its goal of safeguarding investors, stating that this legislation will call for exchange platforms to have internal control systems, risk assessment, and suitable custodial arrangements to secure clients' money.
In addition to crypto regulation, Leung also revealed the SFC aims to make Hong Kong a hub for green financing: “If there are adequate laws in place, then the possibility of an FTX-type collapse will not happen in Hong Kong.”
She said that in order to assess the risks associated with listed businesses' climate disclosure, the SFC would collaborate with the Hong Kong stock exchange on a separate survey later this year. Although the necessity for cryptocurrency regulation has emerged, the industry still strives for wider adoption.
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