Securities and futures commission (sfc) of hong kong recently announced plans to propose a subset of tokens for retail investors’ trading. this move aims to make hong kong more friendly to crypto startups and focus on investor protection. it would replace the previous regime set up in 2018 that restricted access to crypto to institutional investors who had portfolios valued over hk$8 million ($1 million). sfc’s ceo julia leung said that the new virtual asset service provider (vasp) regime will also seek public views about specific guardrails for retail trading.
Announcement was made at the 2021 asian financial forum, and the sfc plans to start accepting applications for vasp licenses in mid-2024. consultation on retail trading is expected to start within the first quarter of this year. all trading platforms and exchanges that wish to operate in hong kong will be required to apply for a license or else face fines and potential jail terms.
Potential to allow retail traders back in on digital assets was first teased by elizabeth wong, head of the fintech unit at the sfc, back in october last year. leung said though that the tokens that will be offered to retail investors will be restricted to those that are “highly liquid.” the sfc is looking to allow individuals to “directly invest into virtual assets” in order to make hong kong more friendly to crypto startups and focus on investor protection. a crypto wallet provider or an exchange are both examples of a vasp. the sfc has not yet responded to decrypt’s inquiry into which tokens that may include or exclude.