Global Digital Finance Warns Hong Kong’s Proposed Rule Will Send Crypto Investors to Unregulated Exchanges
Recently, the crypto industry players in Hong Kong have focused on fighting a proposed law that limits crypto trading only to professional investors, which will practically see about 93% of the populace locked out of the crypto market.
A key cryptocurrency advocacy group, Global Digital Finance (GDF), is warning that if the proposed law goes through, most retail investors and traders will move to unregulated and unlicensed platforms.
Global Digital Finance is made up of leading crypto exchanges such as Coinbase, BitMex, OKCoin, and Huobi, steering the efforts against the proposed new legislation.
Their caution comes after the independent Financial Services. The Treasury Bureau (FSTB) came up with a crypto regulation framework late last year that seeks to ban all retail traders from participating in the crypto market. At the time, the regulator stated that the proposal was in line with the Financial Action Task Force (FATF) recommendations. At the time, the regulator explained that the new law was also meant to tighten Anti-Money Laundering (AML) as well as counter-terrorism financing measures.
However, the proposed law exceeds FATF’s recommendations and is in tandem with the stringent stance against crypto trading in mainland China.
The new law is under the public participation phase and is set to end soon before the legislation becomes law.
“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 GDF’s chair, Malcolm Wright.
Wright explained that Hong Kong risks joining other crypto-hostile destinations stating that other FATF members such as the United States, United Kingdom, and Singapore all permit retail investors to participate in the crypto market.
A recent survey conducted by CitiBank found that only 504,000 people (7%) owned enough assets that meet a professional investor's requirements.
The group also explained that the restrictions would also curtail innovation and even financial inclusion.