Suppliers of non-fungible tokens which involve capital raising must obtain a license from the securities regulator, says the Securities and Futures Commission.
SFC deputy chief executive Julia Leung Fung-yee said at a conference that it is necessary to supervise the NFTs used to raise funds, which is under the scope of "regulated activities," except those as collectibles like artworks and red wine.
At present, Leung said the main focus is on investor education to increase the public's knowledge of different products and to remind NFT or virtual assets of the risk of large fluctuations.
In other news, the SFC reprimanded and fined hedge fund firm Asia Research & Capital Management HK$1.75 million for lapses in disclosing its short position in Premier Oil, in a bid to monitor short positions and ensure compliance with European Union rules.
The regulator also banned Billy Wong Yim-chi, the firm's former head of compliance and operations, for two months until December 9. Wong left the distressed investment firm two years ago.
The sanctions came two years after the United Kingdom's Financial Conduct Authority fined the firm 873,118 (HK$7.57 million) for the same omissions. ARCM, then the largest creditor of the UK oil and gas producer, failed to make 155 regulatory notifications and 153 public disclosures of short positions between February 22, 2017, and December 3, 2019, the SFC said in a statement.
