Hong Kong steps up regulation and brings crypto-funds under SFC


Hong Kong is pulling rank and is paying increasingly close attention to cryptocurrency funds.
In a statement published earlier today, the Securities and Futures Commission (SFC) stated it would be putting cryptocurrency funds under its watchful eye. The SFC is the Hong Kong equivalent to the US’ Securities and Exchange Commission (SEC).
The move to regulate and watch cryptocurrencies is supposed to increase protection for investors. It means that any investment funds based in Hong Kong (that deal specifically in “virtual assets”) will have to be licensed and registered with the SFC.
The SFC defines “virtual assets” as pretty much any form of blockchain-based token including: digital currencies, utility tokens, and assets-backed tokens.
Purveyors of cryptocurrency funds, as a result, will be legally bound to making recommendations in the best interest of their clients. This will prevent any cowboy traders from over-selling to clients who can’t really afford the risk.
“To avoid concentrated exposure to this nascent asset class, intermediaries should ensure that the aggregate amount to be invested by a client in virtual asset funds which are not authorized by the SFC is reasonable, as determined by the intermediaries, considering the client’s net worth,” the statement reads.
While this will help citizens of Hong Kong avoid untrustworthy cryptocurrency fund operators, it won’t protect them from the volatility of what’s being invested in. That said, Bitcoin has been pretty stable recently. But y’know, anything could happen.
Source: The Next Web
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