In a press conference, the Securities and Futures Commission (SFC) of Hong Kong has affirmed the requirement of licensing for capital fundraisers of non-fungible tokens (NFTs), reports The Standard.
Deputy Chief Executive Julia Leung Fung-yee explains that canvassing funds for NFTs is an action falling under the scope of regulated activities. Virtual assets like NFTs and cryptocurrencies are often vulnerable to broad fluctuations.
The SFC has also outlined that the characterisation of NFTs that have been fractionalised in a manner similar to traditional securities is to be considered a “collective investment scheme” (CIS). Under this classification, the activity of marketing or distributing a CIS would become actions that must obtain licensing and require the SFC to exercise regulation unless exempted. If the public is involved in said activities, the SFC will also have a claim to stake authorisation over the CIS.
Established since 1989, the SFC is an independent statutory body that aims to regulate the securities and futures markets in Hong Kong, primarily operating via transaction levies and licensing fees.
