Hong Kong's Securities and Futures Commission (SFC) said it would update its policies on virtual currency sales and requirements "in light of recent market developments and inquiries from the industry."
In a notification dated October 20, the SFC stated that under the updated guidelines, certain virtual currency products will be available only to professional investors. Additionally, in the crypto space, brokers must “assess whether clients are knowledgeable about investing in virtual assets” before executing transactions.
“While virtual assets have become more popular in some regions around the world, the global regulatory landscape remains unregulated,” the SFC said. "The risks of investing in virtual assets that the SFC identified in 2018 still apply."
The updated requirements consider virtual assets under the SFC to be “complex products” and apply the same guidelines as similar financial products. The commission specifically cites crypto exchange-traded funds and products issued outside Hong Kong as examples of complex products.
Many crypto users in Hong Kong are still reeling from the scandal around the JPEX crypto exchange. In September, the SFC announced that it had received more than 1,000 complaints regarding JPEX, with users claiming millions of dollars in damages. Local police later arrested six JPEX employees accused of operating an unlicensed crypto exchange.
It's unclear whether the SFC's updated policies are a direct result of events around JPEX, but the regulator said in September it would step up efforts to inform crypto investors of the risks. In October, the Hong Kong Police Service and the SFC formed a working group to monitor and investigate potential illegal activities related to digital assets.
Magazine: Bitmain's revenge, Hong Kong's crypto roller coaster: Asia Express
In a notification dated October 20, the SFC stated that under the updated guidelines, certain virtual currency products will be available only to professional investors. Additionally, in the crypto space, brokers must “assess whether clients are knowledgeable about investing in virtual assets” before executing transactions.
“While virtual assets have become more popular in some regions around the world, the global regulatory landscape remains unregulated,” the SFC said. "The risks of investing in virtual assets that the SFC identified in 2018 still apply."
The updated requirements consider virtual assets under the SFC to be “complex products” and apply the same guidelines as similar financial products. The commission specifically cites crypto exchange-traded funds and products issued outside Hong Kong as examples of complex products.
Many crypto users in Hong Kong are still reeling from the scandal around the JPEX crypto exchange. In September, the SFC announced that it had received more than 1,000 complaints regarding JPEX, with users claiming millions of dollars in damages. Local police later arrested six JPEX employees accused of operating an unlicensed crypto exchange.
It's unclear whether the SFC's updated policies are a direct result of events around JPEX, but the regulator said in September it would step up efforts to inform crypto investors of the risks. In October, the Hong Kong Police Service and the SFC formed a working group to monitor and investigate potential illegal activities related to digital assets.
Magazine: Bitmain's revenge, Hong Kong's crypto roller coaster: Asia Express