Crypto industry concern mounts ahead of the likely introduction of a bill to ban retail investors from cryptocurrency trading in Hong Kong.
Hong Kong to ban crypto trading for retail investors by the end of 2021
Despite consultations with cryptocurrency trading platforms, the Hong Kong government intends to introduce a ban on digital currencies at the end of this year.
It is reported that the authorities will also increase surveillance of politically exposed persons. The surveillance will affect not only exchanges in Hong Kong but also outside the region. It is assumed that in this way mainland China will strengthen its position in the autonomous region.
If cryptocurrencies are banned, sites such as BitMEX, Huobi, OKCoin and Coinbase will no longer be able to provide services to private traders from Hong Kong. However, professional traders will still have access to the cryptocurrency market. Note that a professional trader is a person who has a portfolio of at least $1 million.
However, according to last year’s Citibank poll, there are about 7% of professional traders in Hong Kong. Thus, access to the crypto market may be closed for 93% of the population of Hong Kong.
It is worth noting that Hong Kong, despite its prohibitive rhetoric, still has licensed crypto services. In mid-December, for example, Hong Kong’s financial regulator issued its first virtual asset trading license to OSL. However, even then, OSL stressed that the license would not make the market more accessible to private traders.
For the first time, Hong Kong’s plans to tighten regulation of the crypto market became known in November 2020. Then it was reported that the local regulator will control local crypto exchanges, regardless of whether they trade in securities or not.
At the same time, the Hong Kong Securities and Futures Commission explained the tightening by the desire to track unlicensed sites. How the identification of politically exposed persons is related to the identification of shadow crypto exchanges remains unknown.
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