TL;DR Breakdown
- Crypto exchanges have warned of the possible risks retail investors in Hong Kong might face if banned.
- They argued that most of them will move to overseas and unregulated platforms to trade crypto.
Just when cryptocurrencies are seeing increases in market value amid the growing rate of institutional adoption, Hong Kong is looking to ban retail investors and traders in the country from accessing cryptocurrencies. A group of major crypto exchanges warned today that such development might result in an increase in financial crimes, as some investors will shift to overseas and unregulated platforms to trade crypto.
Crypto exchange warns of possible increase in crime
As the South China Morning Post reported on Monday, the Hong Kong government is looking to introduce a bill that seeks banning retail investors from trading cryptocurrency. Only professional investors would be able to trade cryptocurrencies, when the bill is passed. However, Global Digital Finance, an industry body representing major crypto exchanges like OKCoin, Coinbase, BitMEX, etc., argued that such a move can expose the retail investors to more risk.
Retail investors and traders in Hong Kong might turn to unregulated exchanges or even overseas platforms out of reach of regulation, according to the association. While speaking on the development, the chairman of Global Digital Finance, Malcolm Wright, said “restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets.”
Why treat Bitcoin differently?
Aside from the crypto exchanges, another industry group in the country, the Bitcoin Association of Hong Kong, said there must be a justifiable reason for why the government chose to treat cryptocurrencies like Bitcoin differently from other investable assets and precious metals. “Any barrier put in place to restrict the sale or purchase of bitcoin needs to be reasonable and well justified. Individuals … need to be able to use and accept bitcoin as payment.”
