Hong Kong Industry Group Opposes Stricter Regulations on Virtual Assets, Citing Barriers for Traditional Financial Institutions

The Hong Kong Securities and Futures Professionals Association (HKSFPA) submitted a critical opinion on the 20th against the Hong Kong government's proposed virtual asset management licensing system, arguing that the regulations are too stringent.

The main point of contention is the elimination of the 'minimum standard'. Under the current proposal, the previously accepted exemption for up to 10% of total assets is removed, and traditional equity funds are required to obtain a full virtual asset management license even if only 1% of their portfolio is allocated to Bitcoin.

The HKSFPA points out that this 'all-or-nothing' regulatory approach could obstruct traditional financial institutions from entering the virtual assets space. The government's promotion of Web3 and...