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  • Writer's pictureConnie Chan

Hong Kong to Limit Retail Investors’ Crypto Trading to Only ‘Highly Liquid’ Assets

The crypto market, as most people know, can bring quick profits, but also cause steep losses in a short time. Entities and companies trying to adopt this technology know this and because of that, they have to put the consumer’s protection in mind.

In today’s news, Hong Kong is setting a plan to prioritize consumer protection by limiting retail investors to only trading “Highly Liquid” Crypto Assets. This information was disclosed at the Asia Financial Forum on January 11.

Hong Kong To Shortlist Crypto Assets For Retail Investors

According to Securities and Futures Commission (SFC) CEO Julia Leung Fung-yee, Hong Kong watchdogs are making significant moves to bring crypto regulation to the region. Part of it is shortlisting crypto assets to allow retail investors to trade only “highly liquid” assets with a licensing law.

In addition, Leung said at the Asia Financial Forum on Wednesday that the SFC will issue a consultation paper later this quarter that will give more details on products and conditions for retail investors to trade in virtual assets. Alongside that, the SFC will release guidelines for the licensing requirements for virtual assets exchanges.

Leung further emphasized the limitation of allowing retail investors only trade specific assets. “Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them. We will set the criteria that would allow retail investors to [only] trade in major virtual assets,” said Leung.

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Leaving out exclusive details, Leung did not give any list of which particular crypto assets will make it to the shortlisted crypto tokens for retail trading. However, Robert Lui, digital asset leader at Deloitte Hong Kong, hinted that the SFC might select the top 10 or 20 most liquid virtual assets for retail investors to trade.

Hong Kong Keen On Crypto Regulation

Furthermore, as a part of its interest in investor protection, the SFC also aims to regulate crypto exchanges expressing that the regulation will require exchange platforms to have internal controls, risk management, and proper custodian arrangements to safeguard clients’ assets.

Leung said, “If there are proper regulations in place, then the likelihood of an FTX-type collapse will not happen in Hong Kong.” Besides crypto regulation, Leung further disclosed the SFC plans to ensure Hong Kong is a green financing hub.

She stated that the SFC would work with the Hong Kong stock exchange on a separate consultation later this year to identify climate disclosure risks faced by listed companies. While the need for crypto regulation has surfaced, the crypto market still aims for global adoption.

Total cryptocurrency market cap price is moving sideways on the 4-hour chart. Source: Crypto TOTAL Market Cap on

The global cryptocurrency market capitalization has made some significant moves over the past few days and currently sits at $845 billion at the time of writing.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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