Hong Kong authorities warn of the risks of investing in high-yield crypto products

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Hong Kong Securities and Futures Commission (SFC) reminded investors that digital asset products with high interest rates on deposits are not protected by law in the country.

According to the regulator, such proposals maypass off as deposits or savings products, but actually have nothing in common with bank deposits. The SFC warned that many platforms offering similar investment products are not subject to any transparency and financial soundness rules.

Therefore, if such a platform for investmentgoes out of business, is hacked or is subject to fraud, investors risk losing all of their investments held on the exchange. The SFC warned that some virtual asset investment products could be classified as unlicensed investment funds and advertising them to the Hong Kong public could result in a fine of HK$500,000 ($64,293) and three years in prison.

Let us recall that recently investment companiesHong Kong's CSOP Asset Management, Samsung Asset Management and Mirae Asset Global Investments have filed applications to launch futures ETFs with the Hong Kong Securities and Futures Commission.