Hong Kong aims to tighten cryptocurrency trading for retail investors later this year, the South China Morning Post reports. The regulatory rules proposed by Hong Kong's Financial Services and the Treasury Bureau (FSTB) could encourage not only financial crimes, but also trigger retail investors' outflow onto the gray digital platform, warns the industry body Global Digital Finance (GDF) which represents such cryptocurrency exchanges as Coinbase, Huobi, BitMEX, and OKCoin.
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The report says the Hong Kong authorities also plan to widen due diligence on "politically exposed persons." The GDF's Advisory Council Chairman, Malcolm Wright, emphasizes restricting crypto trading to professional investors only "is different to what we have seen in other jurisdictions."
The potential ban would isolate from the cryptocurrency market approximately 93% of the city's population as the number of professional investors in Hong Kong is estimated at 7%. The Bitcoin Association of Hong Kong already issued a statement in which highlighted that any barrier put in place to restrict the sale or purchase of bitcoin (EXANTE: Bitcoin) "needs to be reasonable and well justified."
As iHodl reported in November 2020, Hong Kong's authorities agreed that all crypto trading platforms must be regulated in order to legally operate. Prior to this, requirements only applied to platforms trading securities. Ashley Alder, chief executive of Hong Kong's Securities and Futures Commission, said the regulator had been applying a selective legal framework to crypto trading platforms, resulting in some of them operating beyond the control of regulators.
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