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.

The Hong Kong Securities and Futures Commission's official website for virtual asset trading platform license application information shows that NewBX Limited, the company behind the virtual asset trading platform "Bixin.com", submitted a virtual asset trading platform license application on January 24th, but has not yet disclosed its Chinese name. As of now, the number of companies that have submitted applications for virtual asset trading licenses in Hong Kong has reached 13.

The People's Bank of China and the Hong Kong Monetary Authority decided to launch six policy measures, including deepening the cross-border pilot of digital RMB, to bring more convenience to residents and enterprises in Hong Kong and the mainland. According to reporters, based on previous testing and verification, the Digital Currency Research Institute and the Hong Kong Monetary Authority will further deepen their cooperation in the cross-border pilot of digital RMB. More institutions will be supported to participate in the pilot, providing users with more convenient application conditions. Based on the institutions that participated in the previous verification, more participating operating institutions and local banks in Hong Kong will be introduced in the near future. Currently, relevant institutions have basically completed their preparations and will provide services to the public in batches. The scope of service subjects and scenarios will be expanded. It will further facilitate Hong Kong residents to open and use digital RMB wallets; enrich the functions of digital RMB wallets that Hong Kong residents can use; explore personal small cross-border remittance services based on digital RMB to improve remittance service efficiency.

Hong Kong Securities and Futures Commission released its "Strategic Focus for 2024 to 2026". In the area of virtual assets, the Hong Kong Securities and Futures Commission will provide regulatory guidance on new virtual asset activities and promote the development of regulatory systems for virtual asset trading platforms. While supporting the tokenization of traditional products, it will also utilize blockchain and Web3 technologies to safeguard the interests of investors, promote the establishment of a responsible and secure fintech ecosystem, and establish closer ties with local and international law enforcement agencies to combat crime.