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The decision to greenlight digital asset trading for retail investors in Hong Kong beginning tomorrow is “a very big step for crypto in China,” a country known for its unfriendliness to the sector, Justin Sun said.
In an interview with Decrypt on Wednesday, the crypto mogul said that crypto exchange Huobi, which he advises, will begin onboarding Hong Kong residents on Thursday. The Hong Kong Monetary Advisory has said crypto firms can onboard customers during an 18-month grace period during which they will be expected to secure proper licenses.
Hong Kong is allowing retail traders to buy and sell cryptocurrencies in a bid to rebrand the country as a digital asset hub. All crypto trading platforms and exchanges have to apply for a license under the new rules.
The move comes after Hong Kong’s economy and reputation as a fintech hub was shaken following COVID-19 lockdowns and earlier regulatory crackdowns, which scared many crypto startups away.
“I think this is a very big step for crypto in China, because this is, of course, the first jurisdiction in China to legalize crypto trading," Sun said. "And we’ve seen this has been experimented on for the whole China crypto operation.”
He added that the “beauty of Hong Kong’s crypto policy” was that even Chinese citizens could get involved and start trading on his exchange—as long as they also had Hong Kong residency.
China has notoriously strict crypto laws: it banned digital asset trading and mining back in 2021, neutralizing the burgeoning industry.
Hong Kong is a Special Administrative Region; it is governed under the principle of “one country, two systems,” meaning it has some autonomy, but mainland China still has ultimate control over its laws.
Its new law says that individual investors will be able to buy and sell bigger digital assets like Bitcoin and Ethereum. But crypto companies must comply and register with the Securities and Futures Commission (SFC)—or face penalties.
Huobi is currently the world’s 21st biggest cryptocurrency exchange, with a 24-hour trading volume of $386 million, according to CoinGecko data.