According to the new regulations, virtual assets are classified as complex products.
Virtual assets must follow the same regulations as other complicated financial instruments.
The Hong Kong Securities and Futures Commission (SFC) has said that it would revise its regulations concerning the sales and requisite of virtual currencies amid current market trends and demands from the industry.
The SFC said on October 20 that under the new regulations, only institutional investors would be authorized to purchase some types of virtual currency products. When it comes to cryptocurrency, intermediaries “should assess whether clients have knowledge of investing in virtual assets” before taking on any dealings.
Stringent Approach
Moreover, according to the new regulations, virtual assets are classified as “complex products” by the SFC and must follow the same regulations as other complicated financial instruments. As an example of sophisticated products, the commission cites crypto ETFs and products issued outside of Hong Kong.
Many cryptocurrency investors in Hong Kong are still hurting from the recent JPEX controversy. Thousands of consumers have complained to the SFC about JPEX since September, alleging losses in the millions of dollars. Six JPEX workers were subsequently detained by local authorities for running an illegal cryptocurrency exchange.
SFC indicated in September that it will enhance its attempts to keep crypto investors aware of dangers. Although it is unclear whether this is a direct consequence of the events surrounding JPEX. A joint task force between the Hong Kong Police and the SFC was established in October. In order to keep an eye out for any illicit activity involving digital assets.