The Securities and Futures Commission (SFC) in Hong Kong announced today that it will soon allow licensed platforms to serve retail investors.
The SFC said that operators of virtual asset trading platforms who are willing to comply with its proposed guidelines are welcome to apply for a license.
The guidelines will include requirements for asset custody safety, segregation of client assets, and cybersecurity standards.
The guidelines will become effective in June 2023, but the SFC has yet to approve any virtual asset trading platform to provide services to retail investors.
During the consultation period, the SFC received 152 written submissions from within the industry.
The SFC said that it will also be implementing a number of robust measures to protect retail investors, including good governance, suitability during the onboarding process, enhanced token due diligence, admission criteria, and disclosure.
The move is a positive step for Hong Kong’s crypto industry, as it will allow retail investors to participate in the market. However, the restrictions on who can trade cryptocurrencies may limit the number of people who are able to benefit from the new regulations.
The SFC’s decision is in line with the trend of regulators around the world becoming more accepting of cryptocurrencies. In recent months, regulators in the United States, Europe, and Asia have all taken steps to regulate the crypto industry.
The SFC’s decision is also a sign of the growing maturity of the crypto industry. As the industry matures, it is likely that more regulators will adopt a similar approach.