City to regulate crypto trade

Hong Kong will regulate the trading of virtual assets in the over-the-counter market, said a finance official, as mainland investors are reportedly buying cryptocurrencies in the city to flee the sluggish stock market.

Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim said yesterday the government will aim to mitigate the potential risks of virtual assets while providing a transparent regulatory environment for the industry.

This came as bitcoin hovered around US$40,000 (HK$312,000) as market watchers monitored selling pressure from Grayscale's bitcoin fund due to profit-taking activity.

Mainland investors are making use of their foreign currency quota, US$50,000 per year, to transfer funds into their cryptocurrency accounts in Hong Kong amid concerns about China's economic downturn.

Crypto trading is banned in the mainland but is permitted in Hong Kong on regulated platforms.