Recently, the Hong Kong Securities and Futures Commission (SFC) issued a fine of 4 million HKD to a financial institution for multiple violations related to the distribution of virtual asset products. This case exposes several common issues currently present in the industry.

First, the lack of customer suitability assessment. Many platforms, when promoting virtual asset funds, do not adequately understand users' knowledge levels and risk tolerance before recommending products. This is clearly gambling rather than investing. Second, insufficient risk disclosure. Virtual assets are inherently volatile, and investors must be fully aware of the potential downside, but in reality, many institutions' explanations in this regard are superficial.

The final pain point is deficiencies in product due diligence procedures. Before introducing new products, platforms must conduct strict reviews to ensure the products are compliant and operate transparently. If this step is neglected, subsequent problems tend to arise frequently. Although the involved institution has proactively compensated customers, the SFC's stance is very clear: these aspects cannot be compromised. For industry participants, this is undoubtedly a clear compliance signal.