Hong Kong regulator warns investors of the risks associated with investing in non-fungible tokens, which is why it calls for their regulation.
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- Hong Kong regulator puts NFTs non-fungible token, a unique non-interchangeable piece of digital content that is stored on a distributed ledger (blockchain). under its control
- Statement on the risks of non-fungible tokens
- To issue NFTs in Hong Kong you must register with the SFC.
Los tokens no fungibles, NFT non-fungible tokens (NFTs) are cryptocurrencies that do not possess the property of fungibility. are not spared the world’s scrutiny either. Yesterday, the Comisión de Valores y Futuros de Hong Kong (SFC) issued a statement in which it defines that NFTs are under its mandate.
At the same time, it said for the first time that some NFTs that constitute investment products should be regulated regulation is when something is controlled by a specific set of rules. and warned investors about the risks involved in investing in such tokens. It also advised investors to be mindful of regulated securities.
The statement specifically warned of such risks as “illiquid secondary markets, volatility, opaque prices, piracy and fraud.” and warned that if investors s “cannot fully understand them and bear someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.” the potential losses, they should not invest investing is when you put money in a financial scheme with the intent of making a gain. in NFTs”.
The SFC is particularly concerned about the assets that “push the boundary between a collectible and a financial asset.” aquellos que están estructurados como un valor o un esquema de inversión colectiva (CIS).
As he explains Blockworks, un CIS es un tipo de acuerdo de inversión para juntar dinero en torno a un determinado activo o propiedad. La Hong Kong Securities and Futures a futures contract is a standardized legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Ordinance (SFO) specifies that a CIS is managed in escrow a financial instrument where assets or cash are held by a third party while a buyer and a seller complete a deal. and its participants have no day-to-day control over its management, but are subject to receiving earnings, income or other returns.
One recent example includes fractional ownership and offering of security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. tokens, on the blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. Polygon, of the painting Binche Carnival by James Ensor in 1924, on the part of Museo Real de Bellas Artes de Amberes.
While such fractional NFTs fall under the SFC mandate, NFTs of a digital digital technologies are these electronic tools that have the ability to generate, store or even process data. image, work of art, music or video that represent a single copy of an underlying asset do not.
Compulsory license
The financial regulator stated that any Hong Kong resident wishing to issue NFTs or target local investors must obtain a licence from the SFC or be subject to certain licensing requirements under the SFO.
Recently, Hong Kong issued new rules restricting virtual asset intermediaries from offering cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. exchange-traded funds (ETFs) to retail investors, only to professional investors, which it defined as those whose portfolio a collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. exceeds HKD $8 million (about USD $1.2 million). In January, the Hong Kong Monetary Authority also launched a consultation seeking public comment on regulating stablecoins, which it said could become a widely accepted means of payment. There has long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. been talk of of restrictive measures in this autonomous territory and administrative region of China.
Incidentally, NFTs have not fared well of late: overall NFT sales have fallen from between 160,000 and 200,000 per day in November 2021 to around 20,000 per day this week, according to Nonfungible.com .
Sources: Blockworks , South China Morning Post , Tokeny , archivo
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