Hong Kong to Select Crypto Tokens to be Listed for Trading

As investor protection remains a priority for the new virtual asset service provider (VSAP) regime, the Securities and Futures Commission (SFC) will seek public input on specific safeguards for retail trading, according to Julia Leung, the commission's chief executive officer.

"Virtual assets have in the past year gone from peak to low (price) levels. The good thing is that when the froth is taken out from the system as platforms and some tokens collapsed, it focuses investors and sellers' minds on investor protection," Leung said at a panel discussion at Hong Kong .

Hong Kong's decision to allow retail cryptocurrency trading comes after months of turmoil in the sector, the most recent blow being the collapse of crypto exchange FTX.

Bitcoin, the most valuable cryptocurrency, has lost more than 70% of its value since reaching a record high in November 2021.

According to Leung, the SFC will begin accepting applications for VASP licences in mid-2024. All trading platforms and exchanges must apply for a licence under the new crypto regime, or face fines and jail time.

According to industry sources, the retail trading consultation will begin in the first quarter. The SFC will also have jurisdiction over the tokenization of investment funds and bonds, according to Leung.