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Asia’s Crypto Hub, Hong Kong to Unveil Crypto Whitelist for Retail Trading

  • Hong Kong’s government will propose a list of tokens allowing retail investors to trade in cryptocurrencies and crypto exchange-traded funds. 
  • Apart from the list of approved tokens, the SFC CEO added that Leung Fung SFC will liaise with the public on regulations for retail crypto trading.

Hong Kong’s regulator, the Securities and Futures Commission (SFC)has proposed allowing investors to trade a specific list of cryptocurrencies soon to be provided by it. According to the Hong Kong regulator, only high-liquid assets will be considered safe for investors.

The amendment specifies that a virtual asset must either be used as a medium of exchange whether for buying goods, discharging debt, or investing, or provide the ability to vote on the management of affairs related to such assets.

SFC’s new chief executive Julia Leung Fung-yee said this at a panel session at the Asian Financial Forum held in Hong Kong on Jan. 11.

Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them, We will set the criteria that would allow retail investors to only trade in major virtual assets.

Leung stated.

It is also planning to put in place “appropriate regulations” on aspects such as “governance, stabilization and redemption mechanism” of the stablecoin. The regulatory frameworks will also include licensing protocols for crypto exchanges and other virtual asset providers.

SFC’s CEO noted that Hong Kong lost $50 million to crypto scams up to August 2022 despite the country having significant cryptocurrency trading volume.

Hong Kong embraces cryptocurrencies

Late last year, the watchdog called for a tougher regulatory framework noting that it requires client assets to be separated from the firm’s assets, thus prohibiting the crypto platforms from trading on their own account and they can’t lend or have proof of client assets.

A bill was presented to the Legislative Assembly of Hong Kong aiming to expand the current regulatory regime, if the bill became law, all centralized platforms were to be licensed.

Hong Kong, Singapore, and Dubai have attracted crypto entrepreneurs, investors, and tech employees from around the globe in the past half-decade with their friendly views on cryptocurrency. But in recent quarters, they have wrestled with just how open do they want to remain.

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