The Securities and Futures Commission (SFC) of Hong Kong has announced that it will update its policies on sales and requirements of virtual currencies “in accordance with the latest market developments and questions from the industry.”
In a notice dated October 20, the SFC said that under the updated guidelines, some 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” before handling any transactions.
“Although virtual assets are becoming more popular in some parts of the world, the global regulatory landscape remains uneven,” the SFC said. “The risks associated with investing in virtual assets identified by the SFC in 2018 continue to apply.”
The updated requirements consider virtual assets “complex products” under the SFC and subject to the same guidelines as similar financial products. The commission specifically mentions crypto exchange funds and products issued outside Hong Kong as examples of complex products.
Related: Less than 50% of Hong Kong retail crypto investors aware of relevant regulations: Survey
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 is unclear whether the SFC’s updated policies are a direct result of the events surrounding JPEX, but the regulator said in September that it would increase its efforts to inform crypto investors of risks. In October, the Hong Kong Police Force and SFC formed a task force aimed at monitoring and investigating potential illegal activities involving digital assets.