The Hong Kong Securities and Futures Practitioners Association (HKSFPA), a Hong Kong securities industry association, submitted its comments to regulators regarding the proposed regulatory framework for digital asset management in Hong Kong, opposing several tightening measures. The HKSFPA primarily opposes the removal of the current "de minimis" arrangement. Under current rules, institutions holding a Type 9 license (asset management) can allocate no more than 10% of their total fund assets to crypto assets after reporting to regulators, without needing to apply for a separate virtual asset management license. The proposed scheme aims to remove this limit, requiring a full virtual asset management license even for a mere 1% allocation to Bitcoin. The HKSFPA argues that this "all or nothing" regulatory approach is disproportionate and could lead to significant compliance costs with limited risk exposure, thereby discouraging traditional asset management institutions from entering the crypto asset space. Furthermore, the HKSFPA also objects to the proposed custody requirements. The proposal mandates that virtual asset managers can only use SFC-licensed custodians for asset custody. The association stated that this requirement is impractical in early-stage token investment and Web3 venture capital, potentially limiting the scope of related business for Hong Kong-based institutions. Meanwhile, the HKSFPA expressed support for allowing self-custody and the use of qualified overseas custodians when serving professional investors. The report states that the aforementioned regulatory recommendations are already in the implementation phase. Hong Kong authorities had previously released a consultation summary on the relevant proposals and launched a new round of consultations on the licensing regime for crypto asset trading, advisory, and management services. (The Block)