Hong Kong’s Securities and Futures Commission (SFC) has finalised regulations allowing retail investors to trade major cryptocurrencies, including Bitcoin and Ether, starting June 1.

The move comes as Hong Kong aims to establish itself as a leading global Web3 hub, despite concerns from other governments about virtual assets.

Under the new rules, licensed exchanges can offer high liquidity and large market capitalisation cryptocurrencies to retail investors.

Starting June 1, platforms can apply for licences, and those not pursuing licensing should prepare for an orderly closure of their Hong Kong operations.

While no platforms have received approval for retail trading yet, the SFC expects licensed firms to begin accepting retail traders in the second half of the year.

To protect investors, advertising unlicensed cryptocurrency exchanges, including endorsements by key opinion leaders, will be a criminal offence.

Fraudulent or reckless practices inducing others to acquire virtual assets will also be illegal.

Hong Kong’s regulatory framework reflects its ambition to become a global Web3 hub while prioritising strong regulations and safeguards to prevent incidents like the FTX bankruptcy.

Formerly, crypto trading for retail investors was potentially facing a ban in Hong Kong, restricting it to professional investors with over HK$8 million in assets.

Cryptocurrency prices experienced an upswing after Hong Kong’s securities regulator announced retail trading of select crypto assets.

Bitcoin rose 1.7% to $27,293.64, while Ether advanced nearly 2% to $1,851.91.