On January 06, 2026, the Securities and Futures Commission ("SFC") fined Saxo Capital Markets HK Limited $4 million for distributing unauthorized virtual asset products and failing to follow regulatory guidelines. The fines were levied due to a lack of client knowledge assessment and inadequate information provision.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On January 06, 2026, the Securities and Futures Commission ("SFC") reprimanded and fined Saxo Capital Markets HK Limited ("SCMHK") $4 million for unauthorized distribution of virtual asset ("VA") funds and products on its online trading platform from November 1, 2018, to November 25, 2022. The SFC discovered that SCMHK permitted 130 retail clients to trade VA products designated for professional investors ("PIs") only.
The investigation by the SFC uncovered 1,446 transactions involving 32 VA products for six PIs and 130 retail clients, including 21 exchange-traded derivative VA products. Despite regulatory requirements, SCMHK failed to assess clients' knowledge of these products, did not provide sufficient information or warnings, and did not implement specific product due diligence procedures.
SCMHK's non-compliance included inadequate policies and controls for distributing VA products. Specifically, it did not ensure the suitability of transactions in complex VA products for clients and failed to provide adequate risk information. The SFC concluded that SCMHK did not adequately assess clients' knowledge of derivatives when they traded the 21 exchange-traded derivative VA products, constituting breaches of the Guidelines on Online Distribution and Advisory Platforms and the Code of Conduct.
In imposing the $4 million fine, the SFC considered SCMHK's failures over four years, its self-reported misconduct, and remedial actions including client compensation and cessation of regulated activities since February 28, 2025. SCMHK's cooperation and clean disciplinary record facilitated an early resolution of the matter. The 2018 Circular provided guidance on distributing VA funds, while the 2022 Circular emphasized investor protection measures for VA-related products.
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