Hong Kong Crypto Investors Unaware of Regulatory Regime: IFEC Report Finds
Summary:
Only 47% of retail cryptocurrency investors in Hong Kong are aware of the new Virtual Asset Trading Platform Regulatory Regime, according to a report by The Investor and Financial Education Council of Hong Kong. Despite a significant increase in crypto investment amongst adults aged 18-29, traditional stocks still remain the preferred investment choice. The report also reveals concerns around financial literacy and urges investors to understand associated risks before investing.
A mere 47% of Hong Kong's retail cryptocurrency investors are informed about the Virtual Asset Trading Platform Regulatory Regime, a law enacted this past June to safeguard the digital asset investments of retail investors in the area. This data was revealed by a report from the Investor and Financial Education Council (IFEC) of Hong Kong on October 11. The IFEC's study discovered that close to a quarter of the 18 to 29-year-old Hong Kong residents have put money into cryptocurrency in the past year. This is a threefold increase from the average rate, and a dramatic rise from the 3% of this age group that invested in 2019. Despite this surge in digital currency investments, the overwhelming preference for most residents of Hong Kong remains traditionally with stocks (96%), mutual funds and trusts (24%), followed by bonds (18%). Almost 75% of those surveyed said the main objective of investing in cryptocurrency was to generate "short-term profits" and to ward off the "fear of missing out." The survey included 1,000 participants ranging from 18 to 69 years old. Commenting on the findings, IFEC's general manager Dora Li advises investors to comprehend the attributes of the product and associated risks before investing, to ensure the investments match with their financial objectives and risk tolerance levels. Echoing her sentiments, Eric Chui, the head of the Department of Applied Social Sciences at PolyU, emphasizes the importance of deliberate thinking, improved financial literacy, and the gathering of quality market information for virtual asset investors to avoid irrational investment actions and prejudices. From June, Hong Kong has given the green light for retail crypto trading only on licensed exchanges, though the results have been patchy. During this period, the biggest Ponzi scheme in Hong Kong's history, the $166 million JPEX crypto exchange scandal, came to light in China's Special Administrative Region.
Published At
10/11/2023 4:30:00 PM
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