The Hong Kong Securities and Futures Commission (SFC) said on Tuesday that virtual asset investments offering high-interest returns on cryptocurrency deposits and those that guarantee additional assets at fixed rates are unregulated products that are not protected by law.
See related article: Singapore says not possible to protect local users from FTX
Fast facts
- Such offerings may be marketed to the public as “deposits” or “savings” products, which the SFC said are not the same as bank deposits.
- The SFC warned that many platforms offering similar investment products are not subject to any regulation for transparency and financial soundness.
- If a virtual asset investment platform ceases operations, goes out of business, or is hacked or exposed to fraud, investors risk losing their entire investment held on the platform, the SFC said.
- The SFC added that some virtual asset investment products may be classified as unlicensed investment funds, and advertising them to the Hong Kong public could result in a HK$500,000 (US$64,293) fine and three years in prison.
- The SFC’s announcement comes amid FTX.com’s bankruptcy proceedings.
See related article: Hong Kong mulls regulatory requirements for local licensed crypto exchanges: report
