Hong Kong’s SFC introduces new crypto rules post JPEX scandal, categorizing virtual assets as complex products. By Maxwell Mutuma 6 hours ago Updated 6 hours ago
The Securities and Futures Commission (SFC) of Hong Kong unveiled updated policies on virtual currency dealings. The new guidelines promise increased monitoring, citing developing market patterns and comments from industry insiders. Furthermore, these regulation changes come on the heels of a significant crypto exchange catastrophe.
SFC Tightens Rules for Crypto Offerings
Under these revamped guidelines, specific virtual currency offerings will exclusively cater to professional investors. Furthermore, the SFC emphasized the crucial role of intermediaries in the crypto domain. Before conducting any transactions, these intermediaries should ascertain whether their clients know enough about investing in virtual assets.
The SFC voiced concerns over the varying global regulatory framework. “Although virtual assets are gaining traction in select global quarters, the overarching regulatory milieu remains disparate,” the commission remarked. Consequently, the inherent risks pinpointed by the SFC in 2018 persist.
Significantly, the new stipulations categorize virtual assets as “complex products” within the SFC’s purview. This categorization means they will follow the same regulatory procedures as their financial counterparts. Besides, the SFC specifically cited crypto exchange-traded funds and products from outside Hong Kong’s jurisdiction as examples of these complex products.
Recent Controversies and Forward Moves
The JPEX crypto exchange scandal still overshadows many of Hong Kong’s crypto enthusiasts. Last month, startling revelations saw the SFC inundated with over 1,000 complaints against JPEX. Distraught users alleged losses amounting to a staggering sum. Consequently, local authorities apprehended six individuals linked to JPEX charged with helming an unauthorized crypto platform.
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Although it’s still ambiguous whether this policy overhaul is a direct repercussion of the JPEX fiasco, the SFC had previously pledged to ramp up measures ensuring crypto investors remain abreast of potential hazards. Additionally, October witnessed the formation of a joint task force comprising the Hong Kong Police Force and the SFC to oversee and probe any illicit undertakings related to digital currencies.
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