The Hong Kong Securities and Futures Professionals Association (HKSFPA) is opposing new proposals for stricter virtual asset management rules. They argue that the changes could discourage traditional asset managers from entering the cryptocurrency space. Currently, firms with a Type 9 license can invest less than 10% of a fund’s value in crypto without needing additional licensing, as long as they notify the regulator. The proposed changes would remove this threshold, meaning even a small allocation, like 1% in bitcoin, would require a full virtual asset management license. HKSFPA criticized this "all-or-nothing" approach, stating it would lead to high compliance costs without significant risk exposure. They believe such regulations could hinder traditional managers from exploring cryptocurrency investments. This pushback comes as Hong Kong aims to strengthen its position as a crypto hub, having already introduced various licensing frameworks for trading platforms and stablecoin issuers. The authorities have been consulting on these regulatory changes since last year, indicating a growing momentum for stricter oversight in the crypto sector.