The Hong Kong government is seeking to restrict cryptocurrency access to wealthier investors amid an ongoing global crackdown by regulators.
Cryptocurrency exchanges operating in Hong Kong will have to licensed by the Securities and Futures Commission (SFC) and limit access to professional investors – defined as individuals with a portfolio of HK$8 million ($1.03 million) – according to government proposals published on Friday.
Hong Kong’s Financial Servies and Treasury Bureau (FSTB) said it had been consulting the market on the changes since last year and intends to advance its proposals into law in the upcoming 2021-22 session of the city’s legislative assembly.
The FSTB continues to advance the regulatory changes despite concerns by local players that the restriction against retail access could drive exchange abroad and investors to unregulated channels.
According to the FSTB, confining the services of a [virtual asset] exchange to professional investors is appropriate at least for the initial stage of the licensing regime.
Hong Kong authorities’ move to tighten on crypto coincides with similar regulatory efforts elsewhere including China’s crackdown on mining and trading as well as U.S. tax proposals to report cryptocurrency transferal of over $10,000.