Investing in bitcoin (BTC) and other cryptocurrencies is going to be more difficult in Hong Kong. After a consultation with the Financial Services and the Treasury Bureau (FSTB) that took place yesterday, the conclusion is that crypto exchanges will have to obtain licenses from the market regulator. In addition, they should only offer their services to “professional” investors. As a result, small-scale investors cannot be active on the crypto market. In Singapore, for example, licenses are also required, but small investors are still allowed to be customers there.
In order to obtain professional investor status, as an investor you must own a portfolio of at least 8 million Hong Kong dollars, equivalent to about $ 1.03 million. This is according to Hong Kong law.
The FSTB has been discussing changes to the current system for some time. Currently, crypto exchanges in Hong Kong can already apply for a license, but they are not required to do so. If the amendment comes through, they will be. Licenses can be obtained from the Securities and Futures Commission.
Hong Kong has many crypto exchanges, including some of the largest in the world. The decision to make investing impossible for almost everyone can count on a lot of resistance and criticism. Small investors are opposed to the decision and don’t think the regulations are a good idea. They think that the major exchanges could leave the city because of this and with it many investors, who would enter the unregulated markets.
Tighter regulations are more common in the crypto industry. Reports from China recently led to a major market crash.
Incidentally, this is still a proposal and not a final decision. The FSTB will present the proposal at the Hong Kong legislative meeting, according to a report from Reuters.