Cryptocurrency exchanges warn Hong Kong’s new rules will drive retail investors onto unregulated platforms

Name: What are cryptocurrencies?
Uploaded: 2021-02-15T08:00:18.000Z
Duration: 2 min 12 s
Description: What are cryptocurrencies?

Hong Kong’s proposed rules on licensing virtual money platforms could encourage financial crime, said the industry body Global Digital Finance (GDF)

Proposal also widens due diligence on politically exposed persons to include officials from mainland China

Reading Time:3 minutes

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Hugo Zheng, Manager of ixfintech demonstrates how to use a pre-provided paper wallet + QR code to buy bitcoin for giving away as laisee, or hongbao on 8 February 2021. Photo: Felix Wong

Georgina Lee

Published: 4:00pm, 15 Feb 2021Updated: 9:35pm, 16 Feb 2021

Cryptocurrency exchanges are on tenterhooks as they await the outcome of a proposal by Hong Kong’s government to ban retail investors from trading in the city, at a time when digital assets are winning acceptance as mainstream forms of payment and market leader bitcoin rises to a record level.

The city’s Financial Services and the Treasury Bureau published the proposal to limit trading in cryptocurrencies to professional investors back in November. Following consultation with industry bodies and members of the public that ended in January, the government plans to turn the proposal into a bill and introduce it to the city’s legislative council later this year.

The wide-ranging paper also includes a proposal to widen due diligence on politically exposed persons to anywhere outside Hong Kong, bringing officials from mainland China into range amid an ongoing anti-corruption drive across the country.

If Hong Kong bans retail investors from trading cryptocurrencies, they will turn to unregulated platforms out of reach of the law, said industry body Global Digital Finance that represents cryptocurrency exchanges BitMEX, Huobi, OKCoin, and Coinbase.

02:12

What are cryptocurrencies?

The Financial Services and the Treasury Bureau proposed in the consultation paper to widen the scope of the city’s anti-money-laundering and counterterrorist financing ordinance to include crypto exchanges, part of the government’s efforts to comply with recommendations by Paris-based Financial Action Task Force (FATF).

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Cryptocurrency exchanges warn Hong Kong’s new rules will drive retail investors onto unregulated platforms

Hong Kong’s proposed rules on licensing virtual money platforms could encourage financial crime, said the industry body Global Digital Finance (GDF) Proposal also widens due diligence on politically exposed persons to include officials from mainland China

Hong Kong’s proposed rules on licensing virtual money platforms could encourage financial crime, said the industry body Global Digital Finance (GDF)

Proposal also widens due diligence on politically exposed persons to include officials from mainland China