Hong Kong securities industry group opposes the "all or nothing" license requirements of the new cryptocurrency asset management regulations

On January 20th, the Hong Kong Securities and Futures Professional Association raised objections to the proposed regulatory framework for digital asset management, stating that the adjustment to cancel the "minimum exemption threshold" for existing 9-license asset managers may hinder traditional asset management institutions from entering the cryptocurrency field. According to current regulations, institutions holding license plate 9 that allocate less than 10% of their total fund assets to cryptocurrency only need to report and do not need to apply for additional license upgrades. The proposed reform eliminates this threshold and requires obtaining a complete virtual asset management license even if only 1% of the encrypted assets are allocated. The association believes that this move lacks the principle of proportionality and may increase compliance costs and inhibit innovation.