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

02/15/2021

Crypto business concern mounts forward of the seemingly introduction of a invoice to ban retail merchants from cryptocurrency actions in Hong Kong.

Crypto business actors in Hong Kong have been making an attempt to push again towards a forthcoming regulation that will prohibit authorized cryptocurrency buying and selling to skilled buyers, locking out 93% of the native inhabitants from the market.

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

Hong Kong’s Monetary Companies 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 carry home laws into line with suggestions from the Monetary Motion Process Pressure, or FATF. 

But the Bureau’s proposal exceeds the necessities of the FATF’s framework, echoing as a substitute the robust stance in 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 US 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 business our bodies. Now that the session interval has come to a detailed, the proposal is predicted to be was a invoice and launched to Hong Kong’s legislative council later within the yr. South China Morning Publish’s estimate that 93% of the home inhabitants can be affected by the ban relies on a latest CitiBank survey that discovered that roughly 7% — 504,000 people — had sufficient belongings to satisfy the brink for skilled buyers. 

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