Not like China: Hong Kong wants to legalize crypto trading

Hong Kong securities regulator wants to allow retail investors to invest directly in virtual assets and reconsider current requirements for of crypto trading.

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Hong Kong is taking steps to regain its status as a global cryptocurrency hub by launching several legal initiatives related to the crypto industry.

A city and special administrative region of China, Hong Kong is willing to distinguish its approach to regulating crypto from the general ban on crypto in mainland China.

The Hong Kong government is considering introducing its own bill to regulate crypto in its own way, without China, according to Elizabeth Wong, head of the fintech unit at the Securities and Futures Commission (SFC).

One of the SFC's initiatives allows retail investors to “invest directly in virtual assets,” Wong said during a panel hosted by InvestHK, the South China Morning Post reported on Oct. 17.

Such a move would mark a significant shift from the SFC's stance over the past four years, which limits crypto trading on centralized exchanges to professional investors, Wong noted. Eligible investors include people with a portfolio worth at least $1 million, or approximately 7% of the city's population, as of September 2021.

Wong pointed out that the crypto industry has become more compliant over the past four years, suggesting it's time to change the city's stance on crypto, stating:

"We believe that this may be a good time to seriously consider whether we will continue with this requirement reserved for professional investors."

The SFC official also mentioned a few other legal initiatives aimed at developing the crypto ecosystem in Hong Kong, including a policy introduced in January to allow service providers to sell certain crypto-related derivatives. The regulator has also considered allowing retail investors to invest in crypto-related exchange-traded funds, Wong noted.

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