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Hong Kong’s crypto users could shift to “unregulated” and riskier venues to trade their digital assets should the government move forward with tighter controls on the rising sector, a group of crypto exchange owners said over the weekend.

The statements came months after Hong Kong’s Financial Services and the Treasury Bureau proposed limiting retail investors from trading digital currencies. At the time, the proposal said only “accredited” investors with a certain networth and capital could invest in the market.

The Financial Services and the Treasury Bureau proposed in the consultation paper that city officials widen the anti-money-laundering and counterterrorist financing ordinance to include crypto exchanges and their users.

But local businesses differ. As per a report on local publication SCMP, exchanges think users would simply shift to unregulated firms to carry out their activities, industry body Global Digital Finance said. The think tank represents cryptocurrency exchanges BitMEX, Huobi, OKCoin, and Coinbase.

“Restricting cryptocurrency trading to professional investors only is different to what we have seen in other jurisdictions such as Singapore, the UK, and the US, where retail investors can buy and sell virtual assets,” noted Malcolm Wright, chair of Global Digital Finance’s advisory council.

Wright, who joined 100x Group in October, the holding company behind derivatives exchange BitMEX, said users would seek overseas businesses to trade their funds while remaining unfazed with any potential regulation.

Other organizations share those thoughts. Local body Bitcoin Association of Hong Kong, which has championed Bitcoin and crypto regulations and rights in the city, said any potential laws must clearly justify why crypto investors should be treated differently than how traders of precious metals are regulated in the city.

It said in a statement:

“Any barrier put in place to restrict the sale or purchase of Bitcoin needs to be reasonable and well justified. Individuals need to be able to use and accept Bitcoin as payment.”

The proposal comes as Hong Kong battles a difficult economic and political climate. Many in the financial industry have already moved out/signaled their intent to move out of the city in coming years amidst fears of tighter capital controls from the Chinese government.

The proposed crypto rules are also much tougher than most other regulated nations. The government stated that crypto investors should have a net asset value of over $1.3 million, unlike the $250,000 cap in other jurisdictions.

This would mean that 93% of the 7 million-strong would become automatically barred from trading or investing in cryptocurrencies—meaning a blow for the city’s storied past of financial inclusion and favorable policies.

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