Regulatory clarity spurs traditional brokerages’ interest in Hong Kong

Short-Term Crypto Investment Prevails Among Hong Kong’s Retail InvestorsHong Kong’s retail investor interest in virtual assets has experienced a significant surge in recent years, albeit a recent survey suggests that most retail investors take a short-term investment view relative to crypto assets.Photo by Robert Bye on UnsplashIFEC studyThis newfound enthusiasm for virtual assets emerges from a recent study published by the Investor and Financial Education Council (IFEC), a subsidiary of the Securities and Futures Commission (SFC), Hong Kong’s securities regulator. The survey found that 6% of retail investors in the city had entered the virtual asset market in 2023, as compared to merely 1% in 2019.Conducted from June to July of this year, the study encompassed 1,000 individuals aged between 18 and 69. The survey uncovered a trend toward crypto investing among retail investors who’ve been enticed by the allure of the emerging asset class. Intriguingly, every single one of the digital asset retail investors in the study held cryptocurrencies in their portfolios. Non-fungible tokens (NFTs) and stablecoins, while still relatively niche, were also present in the portfolios of 6% and 2% of investors, respectively.11% to invest in crypto within 12 monthsAnticipating a further uptick in interest, the IFEC report posits that 11% of those surveyed have intentions to invest in virtual assets or related products within the next 12 months. This indicates that the allure of virtual assets continues to exert its magnetic pull on investors in Hong Kong.Despite the growing interest, a noteworthy finding in the survey is that 75% of retail virtual asset investors admitted to their primary motivation being the pursuit of short-term gains. Simultaneously, 74% of these investors perceived virtual assets as a prevalent investment trend, and 73% cited the fear of missing out on popular investment opportunities as a driving factor. These statistics underscore the need for enhanced investor education within the sphere of virtual assets.Lack of regulatory awarenessAnother interesting aspect of the data which emerged from the survey was the finding that only 47% of all surveyed investors are aware of Hong Kong’s recently introduced virtual asset trading regulations, which came into effect on June 1.An additional facet of this investor behavior study was illuminated by research conducted by the Department of Applied Social Science at Hong Kong Polytechnic University (PolyU). This research, based on data from a separate IFEC report that surveyed 501 people from November to December of last year, revealed that many retail investors in virtual assets exhibited overconfidence in their judgment.These investors were also found to have a proclivity to overemphasize past information, lean heavily on readily available and easily recalled information, and overestimate personal intuition.With that in mind, Eric Chui, Head of PolyU’s Applied Social Science unit, advised virtual asset investors to adopt a more deliberate and rational approach. Chui emphasized the importance of building financial literacy and collecting high-quality market information to make informed investment decisions, while steering clear of irrational investment behavior and biases.

Coinbase's venture capital arm, Coinbase Ventures, has invested in the India-based crypto trading platform CoinDCX, the American crypto exchange company said on its official blog. This move follows Coinbase's direct entry into the Indian market earlier this year. In March, Coinbase registered with the Financial Intelligence Unit–India (FIU-IND), announcing plans to launch products for retail investors.Photo by PiggyBank on Unsplash100 million crypto holdersWhile the investment sum remains undisclosed, Coinbase highlighted CoinDCX's strong performance indicators. As of July 2025, the Mumbai-headquartered exchange reported a user base of 20.4 million, accounting for about one-fifth of the country’s estimated 100 million crypto holders. CoinDCX also recorded $141 million in annualized group revenue, $165 billion in annualized transaction volumes, and $1.2 billion in assets under custody. The investment targets a market with high adoption. According to Chainalysis’ 2025 Global Crypto Adoption Index, India ranked first among 151 countries studied. Regulatory uncertainty in IndiaCoinbase’s push into India, however, comes amid a complex and often contradictory regulatory environment for digital assets. On one hand, India maintains a cautious stance. Profits from crypto transactions are taxed at a flat 30% rate, supplemented by applicable surcharges and an additional 4% cess. Recent reforms unveiled by the Reserve Bank of India (RBI) did not mention the acceptance of crypto assets. Rather than supporting cryptocurrencies, regulators have focused on advancing the central bank digital currency (CBDC), the e-rupee, through pilot initiatives in deposit tokenization and a fintech sandbox. This conservative approach was also evident at the recent 6th Global Fintech Fest in Mumbai. According to Reuters, a handout given to speakers at the Oct. 7-9 event read, “Please avoid political, crypto, religious, or personal remarks on stage or at the venue.” On the other hand, some officials have signaled a willingness to engage. Finance Minister Nirmala Sitharaman said on Oct. 4 that India must prepare to engage with cryptocurrencies such as stablecoins, according to the Financial Times. She noted that no country can stay isolated from broader systemic shifts, possibly alluding to the pro-crypto policies emerging in the U.S. and the anticipated acceleration in adoption. Global exchanges resume operationsFurthermore, India has shown more openness to foreign crypto platforms lately. Bybit recently reinstated access to its mobile app for Indian users via the Apple App Store and Google Play. Last year, both Binance and KuCoin registered with the FIU-IND after paying penalties for earlier compliance violations. Binance was fined 188.2 million rupees (about $2.14 million), while KuCoin faced a lighter penalty of around $41,000. 

Cross Trading of LUNA Tokens Uncovered on Three Korean Crypto ExchangesAccording to a report by the Maeil Business Newspaper on Wednesday, it was discovered that cross trading of LUNA tokens took place on three South Korean cryptocurrency exchanges: Bithumb, Coinone, and GoPax.Three crypto exchangesAn indictment by the Seoul Southern District Prosecutors’ Office against Terraform Labs co-founders Do Kwon and Daniel Shin, along with interviews conducted within the cryptocurrency industry, revealed that Bithumb, Coinone, and GoPax were involved in cross trading LUNA tokens with a combined value of $598 million. Specifically, Bithumb accounted for $224 million, Coinone for $299 billion, and GoPax for $74 billion.The prosecution has confirmed that cross trading continued until the end of February 2022, a period marked by significant demands for virtual asset legislation from both the market and academia. Despite widespread calls for regulations to curb unfair trading practices, these instances of cross trading went undetected.Classification of LUNAMoreover, it is reported that legal punishment for the $598 million worth of cross trading is challenging unless LUNA tokens are officially recognized as securities by the court. Under the Korean Capital Markets Act, only cross trading involving tokens identified as securities can be subject to penalties as a form of market manipulation.During a plenary session of the National Assembly’s Legislation and Judiciary Committee on Tuesday, Justice Minister Han Dong-hoon made a statement suggesting that LUNA tokens could be considered securities due to their backing by real-world assets. However, he said that this distinction might not apply to other tokens.On April 25, the Seoul Southern District Prosecutors’ Office indicted Shin and others as accomplices to Kwon, assuming that LUNA tokens were indeed securities. This case now revolves around whether the prosecution can successfully establish the classification of LUNA tokens as securities during the trial, making it the central issue in the case.Photo by Kanchanara on UnsplashCrypto investor protection legislationLast Thursday, the National Assembly’s National Policy Committee approved a bill known as the “Virtual Assets User Protection Act,” signaling an accelerated legislative process. However, there are arguments suggesting that the definition of cross trading should be further clarified in either the legislation or enforcement decree.A representative of a law firm specializing in virtual assets stated that the implementation of the User Protection Act would take another year even after its promulgation, making it challenging to retrospectively penalize cross trading practices that had already occurred.