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Hong Kong re-evaluates retail sales for Crypto

hongkong crypto

Hong Kong re-evaluates retail sales for Crypto

The Securities and Futures Commission of Hong Kong has received many requests to approve crypto ETFs for trading.

The Securities and Futures Commission, or SFC, in Hong Kong is reviewing regulations surrounding virtual currency transactions, including whether individuals can invest in exchange-traded funds, or ETFs.

According to a report by South China Morning News on Wednesday, the 2018 regulations limited transactions of cryptocurrencies via funds or trading platforms to professional investors with at least HK$8 million ($1,028,624.00) to invest.

SFC’s deputy chief executive Julia Leung Fung-yee stated that the re-evaluation will be made “to see if it is still fit for purpose and whether modifications are required.” Fung-yee, speaking at the 2021 Hong Kong Financial Technology Week conference, said that “virtual assets are edging toward traditional finance,” hence, the need to review the laws.

Crypto ETFs are not available to Hong Kong-based investors, even though these financial instruments can be bought from other countries. In the United States, at least 12 applications for these funds have been submitted to the SEC by firms wanting to provide speculators with a chance to dabble in cryptocurrencies. Several inquiries have been submitted to the Hong Kong regulator by companies wanting to provide such investments.

Since the SFC established these regulations three years ago, digital assets have grown massively in popularity, with Bitcoin (BTC) rising six-fold to $62,238 this week. The rally was spurred by big investors and funds rushing into cryptocurrencies on the belief that they will soon be used in payments while retail investors joined the party for quick profits.

The SFC is collaborating with the de facto central bank, the Hong Kong Monetary Authority, or HKMA, to produce a unified circular after the evaluation. According to Fung-yee, the SFC and HKMA will apply the principle of “same business, same risks and same rules” for banks, brokers and digital platforms conducting digital currency asset-related activities.