The Hong Kong Securities and Futures Commission (SFC) has issued a warning regarding the trading of cryptocurrency derivatives and earnings services on cryptocurrency exchanges.
According to the regulatory authority, these activities are not allowed under current regulations and companies operating in violation of the rules may not be licensed during the transition period.
In an official statement released recently, the SFC warned all cryptocurrency exchanges and related service providers to comply with the current regulatory framework.
The warning came as the popularity of cryptocurrencies and digital asset trading continued to rise in the region, leading the regulator to assert its authority over the industry.
According to the SFC, cryptocurrency derivatives and earnings services are classified as “securities” under the Hong Kong Securities and Futures Regulations (SFO).
Therefore, any organization that provides such services must obtain a license from the regulatory authority. Failure to do so could have serious consequences for the companies involved.
The SFC stressed that it will closely monitor the activities of cryptocurrency exchanges and related service providers throughout the transition period.
Companies operating without the necessary licenses are more likely to face legal action and potential criminal charges.
The warning is a clear message to all market participants that it is extremely important to comply with the regulatory framework.
*Not investment advice.
