The Securities and Futures Commission (SFC) of Hong Kong announced it will update its policies on virtual currency sales and requirements “in light of the latest market developments and enquiries from the industry”.
In an Oct. 20 notice, the SFC said under the updated guidelines, certain virtual currency products will only be available to professional investors. In addition, intermediaries in the crypto space “should assess whether clients have knowledge of investing in virtual assets” prior to handling any transactions.
“Although virtual assets are becoming more popular in some parts of the world, the global regulatory landscape remains uneven,” said the SFC. “The risks associated with investing in virtual assets identified by the SFC back in 2018 continue to apply.”
The updated requirements considered virtual assets “complex products” under the SFC and subject to the same guidelines as similar financial products. The commission specifically mentioned crypto exchange-traded funds and products issued outside Hong Kong as examples of complex products.
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Many crypto users in Hong Kong are still reeling from the scandal surrounding the JPEX crypto exchange. In September, the SFC announced that it had received more than 1,000 complaints related to JPEX, with users claiming losses totaling millions of dollars. Local police later arrested six JPEX employees for operating an unlicensed crypto exchange.
It’s unclear if SFC’s updated policies are the direct result of the events surrounding JPEX, but the regulator said in September it would increase its efforts to keep crypto investors informed of risks. In October, the Hong Kong Police Force and SFC formed a working group aimed at monitoring and investigating potential illegal activities involving digital assets.
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