Hong Kong All Set to Release Crypto Regulatory Framework by Next Month

• Exchanges may legally function but investors face severe regulatory constraints.
• The region recently acknowledged crypto as a property as per a court ruling.

Hong Kong seems to be realizing its goal of becoming a center for the cryptocurrency industry. Guidelines for regulating cryptocurrency exchanges are expected to be released by the Securities Futures Commission (SFC) of the jurisdiction in May 2023.

The finance regulator initiated a similar platform for public input last year. As part of the public consultations held to find the most effective means of giving retail investors access to cryptocurrencies, questions were raised about the prospect of issuing cryptocurrency exchange-traded funds (ETFs) in the area.

Defining Clear Regulations

More than 150 stakeholders provided feedback during SFC CEO Julia Leung’s confirmation of the licensing regime’s consultation process. The forthcoming rules will be helpful to crypto trading platforms that may eventually serve regular investors. 

On or around June 1st, this will take effect. Exchanges may legally function in Hong Kong, but investors face severe regulatory constraints. Individuals who have net worth’s of less than HK$8 million (about $1 million) fit this category.

In addition, once rules are in place, reputable exchanges will be able to open the trading of Bitcoin (BTC), Ethereum (ETH), and other prominent cryptocurrencies to retail traders. The Hong Kong SFC has only approved two cryptocurrency exchanges so far: Hashkey and OSL.

In addition, Hong Kong seems to be making strides toward becoming a major cryptocurrency trading center. The region recently acknowledged crypto as a property as per a court ruling. The community will be able to evaluate its crypto hub status in light of the forthcoming industry rules. With U.S. regulators scrutinizing the sector, Hong Kong seems to be an attractive hub for investors across the globe.