Introduction

In response to growing concerns regarding unregulated virtual asset trading platforms (“VATPs”), on 25 September 2023, the Securities and Futures Commission (the “SFC”) announced the introduction of a series of measures aimed at reinforcing information dissemination and investor education.

Recognising both the potential benefits and risks associated with virtual asset activities, the SFC has been at the forefront of implementing a comprehensive regulatory framework since 2017.  The SFC has also been monitoring virtual asset activities in Hong Kong to detect possible breaches of law under its regulatory remit through gathering information from different sources, including market news, media reports, frequent dialogues with the industry, complaints and social media.  Where appropriate, the SFC would put entities on the Alert List and refer cases to the Police for further investigation.

 New Measures

The SFC has been working closely with its subsidiary, the Investor and Financial Education Council (the “IFEC”), to educate and warn investors about the risks associated with trading on unregulated virtual asset platforms.  The recent JPEX incident highlighted the importance of proper regulation and information dissemination to maintain market confidence.  In light of this, the SFC will be implementing the following measures:

Analysis and takeaways

With its comprehensive regulatory framework and proactive approach, the SFC is committed to protecting investors’ interests, maintaining market confidence, and fostering a sustainable and responsible development of the Web3 ecosystem in Hong Kong.  By implementing stringent measures, enhancing investor education, and collaborating with other regulators and stakeholders, the SFC aims to create a well-regulated environment for virtual asset trading and to mitigate any potential risks.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

The ALB Hong Kong Law Awards is one of the most prestigious and longest-running awards in Hong Kong’s legal community, recognizing the outstanding performance by private practitioners and in-house teams in the region.

Our firm was named finalists in five award categories: “Civil Litigation Law Firm of the Year”, “International Arbitration Law Firm of the Year”, “Matrimonial and Family Law Firm of the Year”, “Private Wealth Law Firm of the Year” and “Hong Kong Law Firm of the Year”. In addition, Ms. Chui was also nominated as “Woman Lawyer of the Year, whilst our Partner Gordon Tsang, was nominated as “Young Lawyer of the Year”.

We would like to take this opportunity to thank ALB for organizing such an incredible event and congratulate all the winners and finalists.

Congratulations to Ms. Chui on this well-deserved recognition!