Investing in Bitcoin and other cryptocurrencies could become more restrictive for residents of Hong Kong as local regulators look to clamp down on the asset class for various reasons.
A senior executive for Hong Kong’s Securities and Futures Commission, or SFC, believes more needs to be done to tackle cryptocurrency fraud, offering clues about future guidance on digital asset trading in the special administrative region.
Deputy chief executive Liang Fengyi said the SFC is obligated to expand the scope of cryptocurrency supervision in the city-state, especially as it pertains to unlicensed trading, according to an English translation of an article published in local newspaper ETNet. She explained that, since crypto assets are not recognized as securities or payment methods, they fall outside the jurisdiction of the SFC. As a result, many investors who have participated in the nascent asset class have suffered significant losses.
Unlike mainland China, Hong Kong permits the trading of cryptocurrencies, although the scope of transactions is under scrutiny. Government regulators in the special administrative region have put forward proposals to limit cryptocurrency trading to professional investors on top of new licensing requirements.
The Financial Services and the Treasury Bureau of Hong Kong are considering restricting crypto access to portfolios with at least $1 million in assets. If passed, the new guidelines would restrict crypto access to roughly 93% of the city’s population.
Multiple crypto exchanges have either halted or limited trading activity in Hong Kong over the past few months. In June, Hong Kong brokerage Futu announced it was halting crypto futures trading over regulatory issues. In August, Binance moved to block derivatives trading for local traders.