Plan to Ban Retail Crypto Traders Could Force Them to Go Underground in Hong Kong
● Concerns rise as Honk Kong proposes to prohibit retail crypto transactions.
● Industry actors warn that the ban could drive retail traders underground.
● The ban could help fight against illicit crypto activities and terrorism funding.
Industry Actors Worried About the Prohibition on Retail Crypto Traders
Industry players in Hong Kong are concerned about the possibility of a ban on retail trading. Industry actors cautioned the oncoming law poises to halt all retail crypto transactions and push about 93% of retail traders out of the crypto market.
Global Digital Finance (GDF), a body of crypto exchanges such as OKCoin, Huobi, responded to the news saying that the law is going to drive retail traders to unregistered platforms. Ever since the news of the proposed ban, the group has been advocating for the rejection of the imminent law.
Ban on Retail Crypto Traders Could Force Them to Go Underground
Retail traders make up a larger percentage of the whole trading population in Honk Kong, and the law, if enacted, would drive them underground.
The proposal was initially brought forward in November 2020 in order to strengthen the government’s plan against illicit crypto activities and terrorism funding. However, it appears that the proposal extends beyond the required conditions of the FATF, which seems unfair to retail traders and businesses alike.
The chairman of the GDF emphasized that FATF members in other countries like Singapore have placed no restriction on their retail traders. The bill would reportedly be introduced to Hong Kong’s legislative council before the year runs out.
A recent report revealed that just a handful of crypto investors (about 7%) qualify as a professional. The law would also affect Bitcoin ATMs and cryptocurrency businesses and could deter the expansion of cryptocurrency and financial inclusivity.
