Mainland China has banned cryptocurrencies since 2021, however, Hong Kong will allow retail investors to trade cryptocurrency under its new regulation. Beginning June 1, authorities will accept applications for licenses from crypto exchanges, enabling them to sell tokens such as bitcoin and ether to individual traders.
Christopher Hui, Hong Kong’s secretary for financial services and the treasury, told AFP in an interview that the new crypto exchange regulations have drawn in over 80 inquiries with the city’s investment promotion agency.
“Despite the potential risks involved, (virtual assets) also carries with it fundamental value,” he said. “So for these positive elements to be harnessed, these activities have to be allowed in a regulated way.”
Regulators Have Their Eyes on Cryptocurency
Following the collapse of the trading platform FTX, regulators are once again on a mission to crack down on crypto markets.
Although Hong Kong was skeptical about allowing crypto exchanges to accept retail clients, Hui recognized that there was “considerable interest” in trading.
With these new rules, crypto exchanges are required to evaluate the client’s knowledge of cryptocurrencies, risk tolerance, and enforce risk-exposure limits.
We have covered how the regulation of cryptocurrencies has become an increasingly contentious issue. The debate still remains as to the way it must be regulated to the need of regulation at all.
