Crypto Exchanges Advises Hong Kong Against Proposed Crypto Ban

The Global Digital Finance, an industry body representing the cryptocurrency exchanges BitMEX, Huobi, OKCoin, and Coinbase, has warned Hong Kong authorities of the terrible repercussions of passing the bill to limit crypto trading to institutional investors.

The proposal, which was forwarded by Hong Kong’s Financial Services and the Treasury Bureau to the city’s government back in November,  stated that retail investors in Hong Kong be banned from trading cryptocurrencies.

Although the proposal is not in effect yet, it has a higher chance of being adopted, since, after the conclusion of the deliberation among industry bodies and members of the public in January, the government plans to process it into a bill and submit it to the city’s legislative council later this year.

According to a recent report, the Global Digital Finance advisory council’s chairman, Malcolm Wright, said that if the ban is placed, these retail investors will turn to unregulated exchanges.

“If banned from trading on Hong Kong licensed exchanges, retail investors would trade on overseas exchanges or trade on unlicensed platforms.”

The authorities had wanted to comply with the recommendations by the Paris-based Financial Action Task Force (FATF) to increase anti-money laundering and counterterrorist financing ordinance through the bill.

However, Wright noted that while other countries like Singapore, the UK, and the US also placed some restrictions on their retail investors, Hong Kong restriction might be a little overboard since retail investors in countries with restrictions can still buy and sell virtual assets.

By banning retail investors from trading crypto, a survey on the number of professional investors in the city revealed that the government would be telling about 93 percent of the city’s population to stay off cryptocurrency trading.

In reply to the Hong Kong government, the Global Digital Finance body concluded, “Any barrier put in place to restrict the sale or purchase of bitcoin needs to be reasonable and well justified. Individuals … need to be able to use and accept bitcoin as payment.”

Digital currencies are recently gaining mainstream acceptance with their prices skyrocketing to new all-time highs.

In a recent report, Elon Musk, CEO of Tesla, acquired $1.5 billion worth of bitcoin and accepts the cryptocurrency as a payment method.

Besides, the largest custodian bank globally, Bank of New York Mellon Corp. (BNY Mellon) is planning to join the crypto community and open a new digital custody platform to allow clients to conduct transactions using digital currencies.