Hong Kong Warns on Risks of Bitcoin Futures

Hong Kong finance regulator has published a new circular related to bitcoin futures
12 December 2017   778

On December 11 the Securities and Futures Commission (SFC) of Hong Kong published a circular that reminds that only licensed firms are allowed to offer bitcoin futures within Hong Kong. Investors are also reminded of the risks associated with these products.

Hong Kong investors may be able to trade in bitcoin futures through an intermediary which is a member of these exchanges....The industry is reminded that a party is required to have an appropriate licence with the SFC if it provides any other business services relating to bitcoin futures.

 

The circular of the SFC

According to circular, other forms of cryptocurrency-related investment products are available to investors in the country including cryptocurrency options. Failure to obtain a license to offer such services "may be committing a criminal offence under the SFO".

SFC also reminded investors about the potential risks in trading cryptocurrencies including insufficient liquidity and price volatility.

The circular was published on the first day of trading of the CBOE’s futures contract, which went live late Sunday.

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   137

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.