1. Hong Kong’s securities regulator introduces initiatives expanding retail investors’ access to virtual asset platforms.
2. Guidelines for virtual asset trading platforms include safety measures for asset custody and client asset segregation.
3. SFC emphasizes transparent expectations, while no platform approval is granted yet; non-compliant businesses advised orderly closure.

The securities regulator in Hong Kong has unveiled fresh initiatives aimed at granting retail investors the opportunity to utilize virtual asset platforms, thereby broadening their access to cryptocurrency trading.

Hong Kong’s Securities and Futures Commission (SFC) declared that licensed cryptocurrency platforms will soon be permitted to cater to regular retail investors. Virtual asset trading platform operators who are prepared to adhere to the SFC’s suggested directives are encouraged to seek licensing approval.

The guidelines governing virtual asset trading platforms will encompass various criteria, including requirements pertaining to the safety of asset custody, the segregation of client assets, and cyber security standards.

The document cited:

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.

Hong Kong’s securities regulator

SFC CEO Julia Leung emphasized the importance of establishing transparent regulatory expectations, stating that it is crucial for fostering a responsible and innovative development environment. While the application process has been initiated, the readiness of Hong Kong remains a question.

Meanwhile, the SFC has affirmed its commitment to implementing several strong measures aimed at safeguarding retail investors. These measures include promoting good governance, ensuring suitability assessments during the onboarding process, conducting thorough token due diligence, implementing admission standards, and enhancing disclosure practices.

Despite the upcoming implementation of the guidelines in June 2023, the SFC has not yet granted approval to any virtual asset trading platforms for servicing individual investors. The SFC received 152 written submissions from industry stakeholders during the consultation period, as mentioned in the announcement.

The release also highlights that most virtual asset trading platforms available to the general public currently operate without regulation from the SFC. It further advises businesses that are unwilling to comply with the forthcoming guidelines to make plans for an organized closure of their operations in Hong Kong.

In a Forex Suggest study published in July 2022, Hong Kong was identified as the most well-prepared country for widespread cryptocurrency adoption, attaining a high crypto-readiness score of 8.6.

Posted Date: July 11, 2023