Hong Kong Warns Investors About Saving With Virtual Asset
The Hong Kong Securities and Futures Commission (SFC) stated on Tuesday that virtual asset (VA) investments that provide high-interest returns on cryptocurrency deposits, as well as those that guarantee additional assets at fixed rates, are unregulated and not legally protected.
Platforms that guarantee stable or high-interest rates on deposits have been specifically targeted by the government. The regulator emphasized that crypto deposits are uncontrolled and are not the same as protected bank deposits.
The SFC stated that if a virtual asset investment platform ceases operations, goes out of business, is hacked, or is subject to fraud, investors risk losing their entire investment kept on the platform.
“The SFC wishes to remind investors of the significant risks associated with investing in these types of VA Arrangements. Investors may suffer significant or even total loss, especially in the event of fraud or collapse of a VA platform as evident in the recent fallout of a number of VA platforms.”
The SFC noted that several platforms selling similar investment products are not subject to any transparency or financial soundness regulations.
The SFC’s warning comes after the once-mighty exchange FTX collapsed after just a week last month, raising alarm bells for investors.
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