Crypto savings, staking products not protected in Hong Kong, finance regulator says
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
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