Cryptocurrency users in Hong Kong may switch to “unregulated” and more risky locations to trade digital assets if the government moves to tighter controls over the sector. is growing, said a group of exchange owners over the weekend.
The statements come months after Hong Kong’s Financial Services and the Treasury Department proposed to restrict retail investors from trading digital currencies. At the time, it was proposed that only “recognized” investors with a certain amount of capital and net assets could invest in the market.
In its consultation document, the Department of Finance and Financial Services proposed that city officials extend the anti-money laundering and anti-terrorism funding ordinance to include exchanges and their users.
But local businesses are different. As reported on SCMP, exchanges think that users will simply switch to unregulated companies in order to conduct their operations, industry agency Global Digital Finance said. Major exchanges include BitMEX, Huobi, OKCoin, and Coinbase.
Global Digital Finance advisory board chairman Malcolm Wright noted the council:
“Restricting cryptocurrency trading only to professional investors is different from what we’ve seen in other jurisdictions such as Singapore, UK and US where retail investors can buy. and sell virtual assets ”.
Wright, who joined 100x Group in October – the holding company behind the derivative exchange BitMEX said users would look for overseas businesses to trade their money while still not subject to any credit. Potentially bound.
Other organizations share those thoughts. Hong Kong’s local Bitcoin Association body, which advocates for Bitcoin and cryptocurrency regulations and rights in the city, says any potential law must clearly explain why investors Cryptocurrency investment should be treated differently from how precious metal traders are regulated in the city.
They emphasized in a statement:
“Any barrier put in place to restrict the sale or purchase of Bitcoin should be reasonable and justifiable. Individuals need to be able to use and accept Bitcoin as payment.
The future of cryptocurrencies in Hong Kong
The proposal is made in the context of Hong Kong facing a difficult economic and political environment. Many in the financial industry have moved / signaled an intention to move out of the city in the coming years due to concerns about tighter capital controls from the Chinese government.
The proposed cryptocurrency regulations are also much tougher than most other regulated countries. The government stated that crypto investors must have a net worth of over $ 1.3 million, unlike a $ 250,000 capitalization in other jurisdictions.
This means 93% of the 7 million people will be automatically banned from trading or investing in cryptocurrencies – meaning a blow to the city’s long past in terms of financial inclusion and favorable policies. profit.