Hong Kong to only allow investing in highly liquid virtual assets

Hong Kong’s Securities and Futures Fee (SFC) Chair Julia Leung mentioned the fee will enable retail traders to commerce solely extremely liquid crypto belongings, South China Morning Submit reported.

Earlier on Jan. 9, Hong Kong’s Monetary Secretary Paul Chan announced that from June 2023, the federal government will begin issuing licenses to permit crypto exchanges to supply buying and selling providers to retail traders.

Nonetheless, the newly appointed SFC Chair Julia Leung mentioned that buying and selling in crypto belongings shall be restricted to extremely liquid merchandise.

Leung famous that a number of crypto exchanges have over 2,000 belongings listed, however, the SFC won’t enable retail traders to commerce in all of them. Leung mentioned:

“We are going to set the factors that will enable retail traders to solely commerce in main digital belongings.”

The SFC Chair added that solely belongings with deep liquidity shall be on the buying and selling record. Will probably be dangerous for retail traders to commerce belongings with low liquidity as they’re extra vulnerable to market manipulation.

She mentioned the regulator will work to make sure that permitted exchanges have adequate liquidity to deal with unstable market circumstances.

Moreover, the June 2023 regulatory guideline would require crypto exchanges to have danger administration, inside controls, and correct custodian preparations, so as to safeguard their clients’ belongings.

Moreover, Leung mentioned the SFC will work with the Hong Kong Inventory Change to permit listed exchanges to reveal their local weather dangers.

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