Hong Kong Securities and Futures Commission has issued a warning to the public to beware of a suspicious investment product called "Yieldnodes masternode pool" operated by Exceptional Media Limited, a company registered in Hong Kong. The product involves crowdfunding related to cryptocurrency pledging, and has not been approved by the Securities and Futures Commission for sale to the Hong Kong public, and is suspected of violating the Securities and Futures Ordinance. The Hong Kong Securities and Futures Commission noted that the Hong Kong public can access information about the product through the relevant website of the product and multiple social media accounts managed by its management on Facebook, Discord, X, LinkedIn, and Instagram. It has been reported that investors have encountered problems when trying to retrieve their investments in the product. The Hong Kong Securities and Futures Commission has listed the product and its related information on the suspicious investment product warning list as of February 28, 2024, and hereby warns investors to beware of "returns" or "pledges" related to virtual assets, and will take appropriate action against any illegal behavior.

The Financial Secretary of the Hong Kong Special Administrative Region Government, Paul Chan Mo-po, mentioned the latest developments of the Digital Hong Kong Dollar and Digital Renminbi in Hong Kong when releasing the "Budget for 2024-2025". Regarding digital finance, Chan Mo-po stated that the Hong Kong Monetary Authority completed the first phase of the pilot program for "Digital Hong Kong Dollar" (i.e. "Digital Currency at Cyberport") in October last year, studying local retail use cases in multiple categories, such as programmable payments, offline payments, tokenized deposits, etc. The second phase of the pilot program is about to be launched to further study new use cases. Another key project, the "mBridge" (also known as the "Currency Bridge Project") for the cross-border network of central bank digital currencies, has also made progress, and the first phase of services is expected to be launched this year, becoming one of the first projects in the world to settle cross-border transactions of enterprises using central bank digital currencies. In addition, the trial scope of the digital renminbi will be expanded in Hong Kong, and citizens will be able to easily open and use digital renminbi wallets and add value through Hong Kong's fast retail payment system "Faster Payment System", further improving cross-border payment efficiency and user experience.

According to industry insiders, Hong Kong virtual asset trading platform (VASP) license applicants include exchanges that previously held the No. 1 and No. 7 licenses. There are many companies operating over-the-counter (OTC) virtual asset trading outside the market, such as virtual currency exchange shops. The Hong Kong Financial and Treasury Bureau has previously consulted on the regulation of virtual asset OTC. The insider expects that after the transition period expires, if the existing platforms operating in Hong Kong have not submitted their applications, they may either end their business in Hong Kong or continue operating overseas or even underground.

The Hong Kong Monetary Authority issued a circular on the sale and distribution of tokenized products, which sets out the expected regulatory standards that recognized institutions must comply with when selling and distributing tokenized products to customers. The Monetary Authority believes it is time to provide guidance on tokenized product-related activities, to provide clear regulatory requirements for the banking industry, to support continued innovation and the benefits that tokenization can bring, and to take appropriate safeguards from the perspective of consumer/investor protection. As a general principle, the current regulatory requirements and consumer/investor protection measures for the sale and distribution of a certain product also apply to the sale and distribution of that product in tokenized form, because its terms, characteristics, and risks (excluding risks caused by tokenization itself) are similar to those of related products. In addition to the general principle, recognized institutions should implement consumer/investor protection measures related to due diligence, disclosure, and risk management for tokenized products.

Hong Kong Monetary Authority believes that it is time to provide guidance on tokenized product-related activities, to provide clear regulatory requirements for the banking industry, to support the industry's continued innovation and the benefits of tokenization, and to take appropriate measures to protect consumers/investors.

The Hong Kong Securities and Futures Commission and the police warned the public today to beware of suspected fraudulent activities involving an entity that claims to be a virtual asset trading platform. The entity operates under the name "MEXC". MEXC is suspected of using the guise of providing free investment advice to lure victims into joining social media or instant messaging chat groups. In these chat groups, victims interested in purchasing cryptocurrencies are recommended to the website operated by MEXC. Victims are asked to deposit funds into a designated bank account for investment purposes, but later encounter difficulties in withdrawing funds. The Hong Kong Securities and Futures Commission listed MEXC and its website on the list of suspicious virtual asset trading platforms on February 9, 2024.

Hong Kong Securities and Futures Commission reminded the public to beware of suspicious investment products, related projects and arrangements involving "Hong Kong International Financial Center Tokens" (IFCT). The related promotional materials claim that the product has been officially approved in Hong Kong, but in fact it has not been approved by the Securities and Futures Commission for sale to the Hong Kong public.

Hong Kong is set to speed up the development of its crypto market infrastructure in 2024, with plans to launch Bitcoin exchange-traded funds (ETFs) and implement stablecoin regulations. Asset manager Harvest Fund has filed for a spot Bitcoin ETF with the Hong Kong Securities and Futures Commission, with the launch expected after the Lunar New Year holiday in February. Other financial institutions have also expressed interest in launching spot Bitcoin ETF products in Hong Kong this year. Meanwhile, several Hong Kong companies are discussing potential stablecoin trials with the Hong Kong Monetary Authority ahead of impending stablecoin regulations.

The Hong Kong Securities and Futures Commission has warned the public to be cautious of two suspicious cryptocurrency-related products named "Floki Staking Program" and "TokenFi Staking Program". The two products involve cryptocurrency staking services and claim to provide high-level annualized returns of 30% to over 100%. These two products have not been approved by the Securities and Futures Commission for public sale in Hong Kong, and their managers have not been able to demonstrate to the Securities and Futures Commission how these products achieve their high-level annualized return targets. The Securities and Futures Commission has noted that the Hong Kong public can view these two products and their related information on the internet, and therefore on January 26, 2024, the Securities and Futures Commission will publish these two products and their related information on the suspicious investment product alert webpage.

Alexandra Jour-Schroeder, Deputy Director-General of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union of the European Commission, stated that the European Union is maintaining resilience and developing many green finance projects to channel funds into projects. It is expected that more investments will be combined with green finance in the future, and efforts will be made to increase digitization. The European Union and Hong Kong are also developing in the field of virtual assets, and are developing digital currencies. They are also working on disclosure to help manage risks, and will spend more time on disclosure and implementing more details in the future. Therefore, the two sides can work together.