Can Hong Kong Regain Its Status As a Crypto Hub?

13 January 2023

in NFT

Reading Time: 2 mins read

The special administrative region of Hong Kong is slowly growing increasingly friendly to crypto startups with an impending proposal to enable retail investor trading to distinguish itself from mainland China.

Tight regulations in Hong Kong have historically prevented crypto platforms from extending services to retail traders, with the majority of retail traders relying on unlicensed exchanges to operate.

“Virtual assets have in the past year gone from peak to low(-price) levels,” said Julia Leung, the CEO of the Securities and Futures Commission (SFC) at the Asian Financial Forum in Hong Kong. “The good thing is that when the froth is taken out from the system as platforms and some tokens collapsed, it focuses investors and sellers’ minds on investor protection.”

Investor protection is paramount for Hong Kong authorities, who have been on a path to safeguard retail traders from the perils of crypto scams and NFT fraud in recent years.

Last year, Hong Kong’s SFC announced that NFTs or non-fungible tokens exposed investors to “heightened risks.”

“Investors should be mindful of these risks, and if they cannot fully understand them and bear the potential losses, they should not invest in NFTs,” the SFC said.

Over the past few months, Hong Kong cracked down on retail traders and said that only seasoned professional traders would be authorized to trade crypto in its jurisdictions to minimize risks to retail investors.

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