Hong Kong SFC Updates Digital Asset Coverage: Ensures Buyer Safety

• The Hong Kong SFC has restructured its regulatory method to digital belongings, introducing new updates to the digital asset coverage.
• The brand new coverage restricts the sale of complicated digital asset merchandise to retail buyers.
• SFC insists intermediaries assess purchasers’ information of the character and dangers of digital belongings.

Based on the newest studies, the Hong Kong Securities and Futures Fee (SFC) has restructured its regulatory method to digital belongings, introducing new updates to the digital asset coverage. Contemplating the fast evolution of digital belongings for the reason that formulation of digital asset (VA) regulation in 2018, the fee has reviewed and modified the present insurance policies concerning VA-related actions.

One of many main revisions is the distribution of “complicated” digital belongings to skilled buyers. The SFC asserted that the potential dangers of the digital belongings and their associated actions are much less more likely to be understood by retail buyers, pinpointing the company’s determination to facilitate the sale of those belongings solely to skilled buyers.

Distinguished Chinese language crypto analyst Colin Wu shared an X publish on his official account underneath the title Wu Blockchain, highlighting SFC’s phenomenal transfer. Based on his tweet, SFC prioritizes buyer safety by implementing newer buyer safety measures on the distribution of VA-related merchandise.

The novel consumer safety measures embody promoting restrictions and the VA information check. Some digital asset merchandise like an abroad VA non-derivative ETF are thought of “a fancy product” and can be restricted to retail buyers. Nonetheless, some distinctive merchandise, together with the general public futures-based VA ETF, are licensed by SFC for “providing to retail buyers by the respective regulator in a delegated jurisdiction”.

The fee’s enthusiasm for selling the acquisition of information and deciphering the uncanny crypto world amongst retail buyers is obvious of their new technique of information assessments. SFC insists intermediaries “assess whether or not purchasers have information of investing in digital belongings or VA-related merchandise previous to effecting a transaction in VA-related merchandise on their behalf”. If the purchasers lack satisfactory information, the intermediaries are required to coach them on the “nature and dangers of digital belongings”.