Exchanges warn that Hong Kong's crypto retail dealer ban may backfire

Crypto trade actors in Hong Kong have been attempting to push again in opposition to a forthcoming legislation that may prohibit authorized cryptocurrency buying and selling to skilled traders, locking out 93% of the native inhabitants from the market.

In feedback to the South China Morning Publish printed on Feb. 15, trade physique World Digital Finance warned that the proposed legislation could be prone to push retail merchants to embrace unregulated platforms. World Digital Finance represents cryptocurrency exchanges similar to BitMEX, Huobi, Coinbase and OKCoin, and has been on the forefront of trade efforts to push again in opposition to the forthcoming laws.

Hong Kong’s Monetary Providers and the Treasury Bureau first printed the proposal in Nov. 2020, as a part of a bid to toughen Anti-Cash Laundering and counterterrorist financing measures. The transfer aligns with efforts to deliver home laws into line with suggestions from the Monetary Motion Job Power, or FATF. 

But the Bureau’s proposal exceeds the necessities of the FATF’s framework, echoing as a substitute the robust stance in the direction of cryptocurrency buying and selling in mainland China. The chair of World Digital Finance’s advisory council, Malcolm Wright, has identified that FATF members Singapore, the UK, and the USA all proceed to permit retail merchants to participate within the cryptocurrency market. 

All through January, the federal government has been consulting with each members of the general public and trade our bodies. Now that the session interval has come to an in depth, the proposal is anticipated to be was a invoice and launched to Hong Kong’s legislative council later within the 12 months. South China Morning Publish’s estimate that 93% of the home inhabitants could be affected by the ban relies on a current CitiBank survey that discovered that roughly 7% — 504,000 people — had sufficient property to fulfill the edge for skilled traders. 

A consultant from the Bitcoin Affiliation of Hong Kong has not too long ago argued that “to limit retail people from accessing Bitcoin could be overshooting the federal government’s targets of selling innovation, and monetary inclusion.” The proposed restrictions may additionally prolong to Bitcoin automated teller machines, or ATMs, and also will considerably broaden the remit of Hong Kong’s current crypto licensing guidelines for companies.