The regulations on the crypto market have been an active subject in Hong Kong recently. The government of this country has planned to pass new measurements in this industry, in particular, they plan to restrict cryptocurrency investments for retail traders. It can have a bad influence and a negative effect on the market, as the majority of restrictions do. Besides, It was evident that this restriction was about to come in Hong Kong. Even a few months ago the Hong Kong government was planning to regulate all the cryptocurrency platforms. Even Hong Kong’s Future’s Commission passed regulatory measures last year against cryptocurrency trading.
According to the South China Morning Post’s article, this new rule may stimulate financial crime which was predicted by Global Digital Finance (GDF). They added that this may cause a risk that retail investors would start searching for new alternative places and new illegal opportunities for trading. While talking to the South China Morning Post yesterday, Malcolm Wright, chairman of GDF’s advisory council said:
“Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets.”
Hong Kong has an autonomous jurisdiction. Its policy is founded on free-market principles but as we see, sometimes the free market doesn’t mean absolute freedom. Hong Kong’s government isn’t so open about the crypto industry as they think it’s a risky business and they are not so sure about the market’s independence. Therefore, the legislative council of Hong Kong started to impose restrictions on crypto trading from the very beginning. They started to pass new laws in order to fulfill the goals of their desired policy.
There are a lot of blockchain and cryptocurrency regulations going to implement in 2021. This already means that Hong Kong’s government has its own attitude towards the marketplace. They are introducing the domestic population to the new legislative acts according to which some regulations will be introduced. The main goal of Hong Kong’s government actions is to better ensure the investors’ security but on the other hand, this is an ‘‘official’’ goal beyond which some other unknown reasons might be hidden.
We can clearly see that Hong Kong’s government is trying to protect the public from the crypto industry. For this reason, they are attempting to raise awareness about this issue and warn them against all the risks that might await them in the future.
As we can see, Hong Kong’s government is serious about crypto market regulations as they plan to impose a new law order to restrict cryptocurrency investments for retail traders. Many believe that this may cause a lot of trouble because there is a high probability that retail investors will move to the underground market.