The securities regulator in Hong Kong has been instrumental in coming out with a crypto license that will be responsible for safeguarding the interests of retail investors through the implementation of more stringent rules and regulations laid down in terms of digital asset organizations. 

As per reliable information received, this will come into effect from the 1st of June, 2023. This follows a lengthy period of uncertainties in relation to the retail trade in cryptocurrencies, together with the shutting down of FTX, the crypto exchange. As per the regulatory dictum, all of the trading platforms, as well as exchanges, will be required to go in for a license, without which no trading in cryptocurrencies will be possible. 

According to the interim Head of Intermediaries at the Securities and Futures Commission (SFC), Keith Choi,  in this scenario, all operators will be responsible for keeping a watchful eye on retail traders based in China as in their country, crypto trading is illegal. The operators are required to follow the structures and guidelines laid down in their part of the territory. It was in the month of February 2023 that the consulting on cryptocurrency trading witnessed a closure. Relevant feedback was received from 152 submissions.  

All businesses are now expected to establish an exposure ceiling in the case of retail investors, along with providing the opportunity for carrying out retail trading in high-level liquid tokens that were in supply for a minimum period of a year. 

As per the Head of the SFC’s fintech arm, Elizabeth Wong, the newly introduced policy looks closely into all marketing and promotional activities carried out by platforms that do not have the relevant license. Additionally, this goes for the social media influencers who carry out promotional activities and target retail investors in Hong Kong. 

It was only this week when the International Organization of Securities Commissions (IOSCO) took the opportunity of revealing the initial world mindset for the regulation of crypto assets. This stemmed from the urgent requirement following the complete breakdown of the FTX exchange and its unfortunate repercussions. 

Consumer safeguard was indeed the need of the hour, was the unanimous decision, and ways and meant implemented to avoid a repetition of any sort whatsoever. In the meantime, Bitcoin, on its own part, has been successful in making up 75%, which makes it $27,431 in recent times, an encouraging scenario for some investors.   

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