Hong Kong is readying to expand crypto access to retail investors but the local securities regulator said that this would be limited to virtual assets with «deep liquidity».
In order to rein in risks, retail crypto access in Hong Kong will be limited to highly liquid tokens or products, according to newly appointed Securities and Futures Commission (SFC) chief Julia Leung.
«Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them,» Leung said in an «SCMP» report citing a briefing at the Asia Financial Forum.
Deep Liquidity
While Leung did not specifically identify any crypto assets that will be approved for retail investors, she underlined that those with «deep liquidity» will be on the list.
«We will set the criteria that would allow retail investors to [only] trade in major virtual assets,» Leung said.
New Rules
Last month, Hong Kong lawmakers passed an amended anti-money laundering and counter-terrorist financing bill that enacts a new SFC licensing regime for virtual set providers from June 2023 onwards. Those operating without a license will be shut down nine months after the law comes into effect.
«We aim to have a proper regulatory framework to safeguard the interest of all investors and to enhance Hong Kong as a virtual asset hub,» Leung added. «If there are proper regulations in place, then the likelihood of an FTX-type collapse will not happen in Hong Kong.»
Currently, the SFC only allows professional investors – individuals with at least HK$8 million ($1 million) in investable assets – to trade in virtual assets.
