The Securities and Futures Commission (SFC) in Hong Kong has announced plans to enhance its framework on cryptocurrency sales and requirements in response to the evolving market development of the digital asset industry.
In an amendment notice published on October 20, the SFC addressed five key areas related to the crypto industry. These include the distribution of virtual asset (VA)-related products, the provision of crypto dealing services, asset management platforms, advisory services, and implementation steps.
The SFC emphasized the global regulatory landscape for virtual assets remains uneven, despite their increasing popularity and widespread adoption. Risks associated with investing in digital assets, such as anti-money laundering (AML) and counter-financing terrorism (CFT), still exist. However, the SFC and Hong Kong authorities give priority to investor protection due to the significant growth of the cryptocurrency regulatory landscape.
To address these risks, the SFC will introduce updated stringent measures and requirements. The comprehensive amendment notice stated that restrictions would be imposed on the sale of certain assets. For instance, VA-related complex products, like crypto exchange-traded funds and products outside of Hong Kong, will only be available to professional investors. Intermediaries in the crypto space will also assess investors’ knowledge of trading in VAs before executing any transactions.
