SFC may ease regulations on virtual assets

The Securities and Futures Commission is reviewing regulations on virtual assets as their market acceptance has surged over the past three years, deputy chief executive Julia Leung Fung-yee said yesterday.

She said the SFC is considering whether to approve the virtual-assets-based exchange-traded funds as well as whether retail investors can invest in overseas virtual assets online. The current regulations are not enough and the revisions are expected to be announced at the end of the year, Leung added.

This came after a mainland investor went all-in on a cryptocurrency named after the wildly popular Netflix drama "Squid Game" and ended up losing nearly all his investment of US$28,000 (HK$218,400). The so-called squid token crashed to almost zero value on Tuesday after a dizzying rally pushed it to almost US$2,800 last week.

In other news, Financial Reporting Council received 77 reports by informants, of which 67 related to pursuable allegations, and the remaining 10 related to matters outside the its remit in the 18 months ended March 31.

The most common areas of auditing irregularities that it identified include failing to perform the engagement quality control review adequately as well as failing to properly conduct the audit to obtain sufficient appropriate audit evidence on which to base their opinion.