Hong Kong to limit crypto exchanges to investors who have portfolios upwards of $1 million
Hong Kongsaid cryptocurrency exchanges can only provide services to professional investors, Reuters reported.
- These include individuals with investment portfolios of at least roughly $1 million, according to Hong Kong's law.
- Hong Kong also required cryptocurrency exchanges to be licensed before they can operate.
The Hong Kong government has announced that cryptocurrency exchanges can only provide services to professional investors or individuals with investment portfolios of at least roughly $1 million, Reuters reported Friday, a decision finalized after months of discussion.
Hong Kong's Financial Services and the Treasury Bureau also required cryptocurrency exchanges to be licensed before they can operate.
The moves come as governments worldwide determine how best to regulate a nascent and rapidly growing space to protect both professional and retail investors from various risks amid a boom in
Cryptocurrency exchanges in Hong Kong run up to the dozens and include some of the world's biggest. Currently, Hong Kong operated under an "opt-in" approach, which makes it optional for exchanges to apply for licenses to operate.
Regulators and governments in Asia have had different rulings when it comes to cryptocurrency exchanges. For instance, Singapore requires cryptocurrency exchanges to apply for licenses but allows retail investors to trade. China, meanwhile, has altogether banned financial institutions and payment companies from the cryptocurrency business on Tuesday.
Still, the local crypto industry in Hong Kong has voiced its concerns, warning this could drive exchanges out of Hong Kong, Reuters reported. Furthermore, this could even push some investors more into the unregulated areas,
"There are only a few rulings concerning the control of the currency," Francisco Blanch, head of global commodity and derivatives at Bank of America, told Insider. "There are only a couple of guidance notes from a couple of regulators, so there's not a lot going on. And that makes it exciting and interesting, but also quite risky."
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