Hong Kong’s Securities and Futures Commission (SFC) will allow retail trading in a select group of cryptocurrencies as it attempts to introduce regularity clarity to crypto, Reuters reported on Wednesday.
The watchdog plans to propose a subset of tokens that will be approved, CEO of SFC, Julia Leung said at a panel discussion at the Asian Financial Forum in Hong Kong.
Leung said only “highly liquid” assets will be on the list, according to a report by the South China Morning Post.
Hong Kong’s virtual asset service provider regime will be focused on investor protection, the importance of which was hammered home by the collapse of FTX in November last year, according to Leung. The now bankrupt crypto exchange was once headquartered in Hong Kong.
“Virtual assets have in the past year gone from peak to low [price] levels. 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,” Leung said.
Signals out of Hong Kong on the territory’s aspirations for its crypto regime have been mixed in recent months.
Hong Kong was showing signs of relaxing tough regulations to become a more crypto-friendly environment at times last year. The Financial Services and Treasury Bureau said in October that it was open to allowing retail customers to trade cryptocurrency or approving a crypto exchange-traded fund (ETF).
However, in November, Leung – the then deputy CEO of the SFC – called for tough rules to be implemented on crypto firms, saying how FTX’s collapse had highlighted the volatility of digital assets and the threat posed by its links with traditional financial services.
Read more: Hong Kong’s Finance Regulator Calls for ‘a More Solid Footing’ for Crypto
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