Hong Kong SFC Proposes Rules on Use of Virtual Asset-Related Terms, Including “Crypto” and “Exchange”

November 7: The Hong Kong Securities and Futures Commission (SFC) has published consultation conclusions and proposes amending the Securities and Futures Ordinance and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance to restrict unauthorized institutions from using specified terms that may lead the public to mistakenly believe their business is regulated by the SFC or is associated with exchanges, clearing houses and virtual asset trading platforms.

The terms proposed to be restricted include “crypto,” “cryptocurrency,” “crypto coin,” “digital asset,” “digital coin,” “token,” “tokenised assets,” “virtual asset,” “virtual coin,” as well as “exchange,” “market,” “trading platform” and others. The SFC said the restrictions target combinations of these terms and similar terms, and that the use of a single word would not necessarily be restricted. The SFC expects to submit the draft legislative amendments to the Legislative Council for deliberation after finalizing them. If the amendments are passed, the relevant provisions will take effect six months after they are formulated.