Hong Kong Securities Body Pushes Back On Tighter Crypto Licensing Rules

Hong Kong's securities industry is resisting proposed regulatory changes that WOULD eliminate a key exemption for traditional asset managers dabbling in crypto. The Hong Kong Securities and Futures Professionals Association warns that removing the 10% threshold for virtual asset exposure could stifle institutional adoption just as the city positions itself as a digital asset hub.

Type 9 licensed managers currently enjoy a 'de minimis' carve-out allowing up to 10% crypto allocation without additional licensing. The proposed overhaul would force fund managers to choose between full compliance or complete avoidance of digital assets—a MOVE critics call disproportionate to the actual risk profile.

The industry submission argues this binary approach imposes unnecessary compliance burdens while potentially chilling mainstream financial participation in crypto markets. Market participants suggest the regulation could undermine Hong Kong's ambitions to become a bridge between traditional finance and digital assets.