“Hong Kong Securities Regulator Embraces the Future: New Crypto Policies Reflect Market Developments and Expand Opportunities for Investors.”
The Securities and Futures Commission (SFC) of Hong Kong has announced that it will update its policies on virtual currency sales and requirements. This decision comes in response to the latest market developments and industry inquiries.
Under the updated guidelines, certain virtual currency products will only be made available to professional investors. Additionally, intermediaries in the crypto space will need to assess whether clients have sufficient knowledge of investing in virtual assets before handling any transactions.
The SFC acknowledges that although virtual assets are gaining popularity in some parts of the world, the global regulatory landscape remains uneven. The risks associated with investing in virtual assets, which were identified by the SFC back in 2018, still apply.
The updated requirements classify virtual assets as “complex products” and subject them to the same guidelines as similar financial products. The SFC specifically mentions crypto exchange-traded funds and products issued outside Hong Kong as examples of complex products.
This move by the SFC comes in the wake of the scandal surrounding the JPEX crypto exchange. The SFC received over 1,000 complaints related to JPEX, with users claiming losses totaling millions of dollars. In response, the regulator has been increasing its efforts to keep crypto investors informed of risks.
It is unclear if the updated policies are a direct result of the JPEX incident, but the SFC had previously stated that it would enhance its efforts in this regard. In collaboration with the Hong Kong Police Force, the SFC formed a working group to monitor and investigate potential illegal activities involving digital assets.
As the regulatory landscape for virtual currencies continues to evolve, it is essential for investors to stay informed and understand the risks associated with these assets.