{"id":3852,"date":"2023-10-21T00:05:42","date_gmt":"2023-10-21T00:05:42","guid":{"rendered":"https:\/\/infundpros.com\/markets\/crypto\/hong-kongs-sfc-moves-to-update-crypto-market-regulations-following-new-market-developments\/"},"modified":"2023-10-21T00:05:43","modified_gmt":"2023-10-21T00:05:43","slug":"hong-kongs-sfc-moves-to-update-crypto-market-regulations-following-new-market-developments","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3852","title":{"rendered":"Hong Kong\u2019s SFC Moves to Update Crypto Market Regulations Following New Market Developments"},"content":{"rendered":"
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Hong Kong’s Securities and Futures Commission (SFC) has announced plans to update its framework on cryptocurrency sales and requirements amid the evolving market development of the digital asset industry.\u00a0<\/p>\n

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In the regulator\u2019s upcoming amendment notice<\/u> published on October 20, five major parts were addressed with respect to the crypto industry.\u00a0<\/p>\n

These include distributing virtual assets (VA)-related products and the provision of crypto dealing services, asset management platforms, advisory services, and implementation steps.\u00a0<\/p>\n

SFC stressed that while the spread of VA has scaled past regions and increased in popularity, the global regulatory landscape remains uneven.\u00a0<\/p>\n

The risks associated with investing in digital assets, such as anti-money laundering (AML) and counter-financing terrorism (CFT), are still present.\u00a0<\/p>\n

However, the SFC and Hong Kong authorities prioritize investor protection due to the burgeoning growth of the cryptocurrency regulatory landscape.<\/p>\n

This will be followed with updated stringent measures and requirements to curb risks associated with these assets.\u00a0<\/p>\n

The comprehensive amendment notice stated that restrictions would be imposed on selling some assets.\u00a0<\/p>\n

For example, VA-related complex products, like crypto exchange-traded funds and products outside Hong Kong, will only be available to professional investors.\u00a0<\/p>\n

In addition, intermediaries linked with the crypto space will assess whether investors have substantial knowledge about trading in VAs before executing any transactions.\u00a0<\/p>\n

Oversight of Hong Kong\u2019s Latest Regulatory Landscape<\/h2>\n

At press time, there is no specific legislative policy in Hong Kong that regulates virtual assets (VA), and no agency is tasked with scrutinizing the evolving market landscape.\u00a0<\/p>\n

However, several financial regulators have released guidelines to oversee the industry. These include the Hong Kong Monetary Authority (HKMA), Securities and Futures Commission (SFC), and Insurance Authority (IA).<\/p>\n

If a VA has security characteristics as clarified under Cap 571<\/u> of Hong Kong\u2019s Securities and Futures Ordinance (SFO), it will be regulated by the SFC and relevant laws.\u00a0<\/p>\n

The latest guideline notice came after a series of complaints by over 2,300 users of the JPEX crypto exchange, which entails losses of funds and assets worth millions of dollars.\u00a0<\/p>\n

The SFC revealed that the Dubai-based trading platform had operated without a license for VA trading.\u00a0<\/p>\n

Investigation revealed that most victims were newbie investors who were promised massive yields. The faux exchange collaborated with influencers to advertise unregistered products and services.<\/p>\n

To prevent the reoccurrence of the JPEX scandal and provide investors with standard protection, the SFC partnered with the Hong Kong Police Force (HKPF) to set up a crypto-centric group for illicit activities.\u00a0<\/p>\n

According to the official announcement<\/u> on October 4, the new group will continue investigating the JPEX scandals, and more arrests will follow.\u00a0<\/p>\n<\/p><\/div>\n