Definitive guidelines could facilitate reaching its crypto-hub ambitions.
Starting June 1 retail investors in Hong Kong will get access to trade digital assets on licensed platforms. On May 23 the Securities and Futures Commission of Hong Kong published consultation conclusions detailing regulatory requirements for virtual asset trading platform operators.
During the consultation period the regulator received the feedback from numerous market players. 152 written commentaries had been submitted to the SFC, including from companies like Binance, Coinbase, Huobi, OKX, Kaiko, Matrixport, Ripple Labs, PricewaterhouseCoopers and others. The rules took into account the feedback received. Any licensed operator, following the scope of rules, can legally offer services in the region.
According to the document, stable-coins will not constitute part of the retail trading, as regulatory framework for this asset class is expected to be adopted in 2024. Tokens, accessible for retail trading, have to adhere to certain criteria. As a minimum requirement, they need to be included in the two major indexes, so the following tokens are the ones that may be listed in the first batch – Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Polkadot, Solana, Cardano, Avalanche, Polygon and Chainlink.
The new guidelines prohibit advertising certain cryptocurrency, as well as products that offer profiting, staking and crediting. In the end, the main activity of a licensed platform is carrying out an agent function and providing the possibility to place client orders. Any other activity could potentially lead to a conflict of interests and requires additional precautionary measures, as stated in the document.
The platform operator has the responsibility to keep 98% of client assets in the cold storage, excluding rare occasions when the SFC special permission has to be solicited.
Hong Kong has recently tried to position itself as a progressive player on the crypto-market, promoting a number of initiatives to become the next digital assets hub and attract top projects into its jurisdiction. The trend could set a positive effect for the region and crypto-market as a whole.