Regulators across the globe have been taking proactive measures in order to aid the increased demand for cryptocurrencies. With the public investing significant funds into a relatively new financial market, regulators are forced to take charge. Hong Kong, aiming to stay ahead while exercising caution in embracing digital assets, has made a significant move. The Hong Kong Securities and Futures Commission [SFC] announced its decision to permit retail investors to access cryptocurrency exchanges. However, it is important to note that this development comes with certain conditions or limitations.
As indicated in the tweet, the SFC has emphasized that retail investors are permitted to utilize exclusively licensed cryptocurrency exchanges. A May 23 announcement, highlighted the importance of licensed platforms. The regulatory body has adhered to its plan of enabling individual investors to engage in the buying and selling of major tokens such as Bitcoin [BTC] and Ether [ETH], commencing on June 1.
The regulator will introduce a comprehensive set of guidelines that crypto firms must follow. These guidelines will encompass various aspects, including requirements for the safety of asset custody, cybersecurity standards, and the segregation of client assets, among other considerations. The intention is to establish a framework that ensures the protection and security of crypto assets, mitigates cybersecurity risks, and safeguards the interests of clients. Compliance with these guidelines will be necessary for crypto firms operating within the regulatory jurisdiction.
Hong Kong and its “responsible development” Toward Crypto
Julia Leung, the SFC’s Chief Executive Officer addressed the agency’s latest move and said,
“Providing clear regulatory expectations is the key to fostering responsible development. Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”
Additionally, the SFC confirmed that it is yet to approve any crypto trading platform to carry out services. Nevertheless, it has managed to amass 152 written submissions from the industry during the consultation period.