Hong Kong Securities and Futures Commission Updates Crypto Regulations
The Hong Kong Securities and Futures Commission (SFC) has announced its updated decisions and policies regarding transactions, including cryptocurrencies. According to the new guidelines, more emphasis will be placed on the opinions and thoughts of industry insiders, taking into account the evolving market conditions. The announcement comes shortly after a major exchange chaos that occurred in recent days.
SFC and Crypto Rules
Under these revised rules and policies, certain cryptocurrency offerings will only be suitable for professional investors. Additionally, the SFC highlighted the significant role of intermediaries in dealing with cryptocurrencies.
According to the SFC, before engaging in any transactions, these intermediaries should determine whether their clients have sufficient knowledge about investing in crypto assets.
The SFC also expressed concerns about the increasingly complex global regulatory framework and stated:
While virtual assets are gaining attention in certain global circles, the inclusive regulatory environment continues to differ.
As a result, the existence of the natural risks identified by the SFC in 2018 continues. The categorization of the assets mentioned in the new regulations as “complex products” and their classification within the SFC’s jurisdiction is an important point to note. This categorization implies that they will follow financial regulatory procedures.
Furthermore, the SFC specifically drew attention to funds traded on cryptocurrency exchanges and used products outside the jurisdiction of Hong Kong as examples of these complex products.
The Future of Crypto Exchanges
Recently, significant troubles emerged regarding the JPEX cryptocurrency exchange. This situation continues to cause concern among cryptocurrency investors in Hong Kong. As a result of the events that took place last month, more than 1,000 complaints were filed against JPEX.
Users in distress reported facing substantial losses. Following this incident, authorities arrested six individuals associated with JPEX for operating an unauthorized crypto platform.
Additionally, another decision was made. As of October, a joint task force consisting of the Hong Kong Police and the SFC has been established to monitor, track, and investigate any illegal activities related to digital currencies.