Hong Kong’s Securities and Futures Commission (SFC) has published a new circular centered on Bitcoin (Bitcoin) futures contracts and cryptocurrency-related investment products, Cryptocoins News reported.
The circular issued on the day the Chicago-based CBOE began trading its futures contract the regulator reminded providers of Bitcoin futures contracts and other crypto-investment products to comply with legal and regulatory requirements.
“Bitcoin futures have been or will soon be launched by certain well-established futures and commodities exchanges in the United States which are regulated by the U.S. Commodity Futures Trading Commission and authorised by the Securities and Futures Commission (“SFC”) to provide automated trading services,” the Hong Kong regulator wrote.
Noting that Bitcoin futures have been or will soon be launched by certain well-established futures and commodities exchanges in the United States, the regulator added:
“Hong Kong investors may be able to trade in Bitcoin futures through an intermediary which is a member of these exchanges.Any parties or intermediaries providing services related to Bitcoin futures are required to “have an appropriate license with the SFC…irrespective of whether the party is located in Hong Kong, so long as its business activities target the Hong Kong public.”
The regulator also put the spotlight on “some unregulated cryptocurrency exchanges” that are already offering crypto-related futures contracts and investment products to the Hong Kong public. The regulator went on to warn investors about risks involved, stating:
“The SFC reminds investors that trading cryptocurrencies may expose them to risks including insufficient liquidity, high price volatility and potential market manipulation… Investors may be exposed to substantial risks and significant financial losses in trading cryptocurrency futures contracts and other cryptocurrency-related investment products, especially on unregulated exchanges.”