Hong Kong unveils plans to let retail investors trade cryptocurrenciesHong Kong unveils plans to let retail investors trade cryptocurrenciesGiphy GIFGiphy GIF

Hong Kong unveils plans to let retail investors trade cryptocurrencies

Hong Kong has pushed ahead with plans to let retail investors trade cryptocurrencies as it vies with Singapore for supremacy as a digital assets hub.
The proposals, which will first be subject to a six-week consultation with “interested parties”, would also require that no more than 2 per cent of client funds be stored in “hot wallets”, a term used to describe online accounts seen as vulnerable to hacks or phishing scams because their keys are stored online.
Singapore-based crypto hedge fund Three Arrows collapsed in June last year, while an international manhunt for Do Kwon — co-founder of the company behind terraUSD — shone an international spotlight on the city-state.
“This sends a powerful message that Hong Kong wants to reclaim its status as a global crypto hub,” said Henri Arslanian, managing partner at crypto asset management firm Nine Blocks Capital Management.
“Many large crypto firms had difficulty operating out of Hong Kong in recent years, especially due to the Covid travel restrictions. This consultation will add to the renewed momentum that the city is seeing,” he added.
The crypto industry is seeking to rebound after a year defined by plummeting prices, thousands of job cuts and a crisis of confidence that led to the collapse of several high-profile companies, including crypto exchange FTX, which was established in Hong Kong before moving to the Bahamas.
“In light of recent turmoil and the collapse of some leading crypto trading platforms around the world, there is clear consensus among regulators globally for regulation in the virtual asset space to ensure investors are adequately protected and key risks are effectively managed,” said SFC chief executive Julia Leung.