Industry Group Says Hong Kong’s Proposed Crypto Rules Could Drive Traders Underground

A cryptocurrency advocacy group has warned that Hong Kong’s proposed rules on digital asset investment could drive traders toward unregulated platforms.

• In November, Hong Kong’s Financial Services and the Treasury Bureau (FSTB) said its new framework would put all digital asset exchanges under the oversight of the Securities and Futures Commission and limit trading in cryptocurrencies to professional investors only.
• If implemented, the new regime would encourage retail investors to seek out unlicensed and peer-to-peer platforms, according to Global Digital Finance (GDF), an industry body representing cryptocurrency firms including OKCoin, BitMEX, and Coinbase.
• GDF added this would raise the financial risk for retail investors seeking such alternative trading venues.
• “Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets,” said Malcolm Wright, chairman of GDF’s advisory council, said in a report from the South China Morning Post on Monday.

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