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Hong Kong regulator warning about Bitcoin futures

A financial regulator of Hong Kong has published a new circular on futures for bitcoin and other investment products related to cryptocurrency.

12.Dec.17 11:08 AM
By Daria Zaytseva


Hong Kong regulator warning about Bitcoin futures

Issued by the Securities and Futures Commission (SFC) of Hong Kong on December 11, the circular states that only licensed firms can offer such products in Hong Kong, indicating that this is a "type 2 regulated activity" under the Securities and Futures Ordinance.

It was prominently released on the first full day of trading in a futures contract launched by the CBOE in Chicago, which officially went out late Sunday in a live broadcast. It also outpaces the release of CME Group, which begins its own futures contract next week.

"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 authorized by the Securities and Futures Commission (“SFC”) to provide automated trading services," the regulator wrote.

The SFC also stressed that other forms of investment products related to cryptocurrency, including options for cryptocurrency, are available to investors in the country. Non-compliance with the license to provide such services "may be committing a criminal offence under the SFO," according to the circular.

SFC warned investors that Bitcoin futures products of unregulated exchanges of cryptocurrencies are "futures contracts" or "securities" under the SFO. It also reminded investors of the potential risks in trading cryptocurrencies, including insufficient liquidity and price volatility.

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