SFC Fines Saxo Capital Markets HK $4 Million for Misleading Virtual Asset Trading

The Hong Kong Securities and Futures Commission (SFC) has reprimanded and fined Saxo Capital Markets HK Limited HK$4 million for regulatory failures linked to distributing virtual asset investment products on its online platform.

The disciplinary action follows an investigation into how the firm handled crypto-linked instruments over several years, during which retail clients accessed products intended only for professional investors.

Retail Access to Restricted Virtual Asset Products

Between 1 November 2018 and 25 November 2022, Saxo allowed clients to trade virtual asset funds not authorised by the SFC and other VA products. Regulatory guidance restricted such products to professional investors due to their complexity.

The SFC found Saxo executed 1,446 transactions involving 32 VA products for 136 clients, including 130 retail and six professional investors. All products were complex, with 21 being exchange-traded derivatives linked to virtual assets.

Client Assessment and Disclosure Gaps

Saxo failed to assess whether clients had adequate knowledge of virtual asset investments before trading. The firm also did not provide sufficient information or VA-specific risk warnings prior to execution.

For clients trading exchange-traded VA derivatives, 87 clients (82 retail, five professional) traded without Saxo making adequate enquiries into their derivatives knowledge, limiting proper suitability assessment.

Product Identification and Internal Controls

The investigation highlighted weaknesses in Saxo’s internal controls. The firm lacked dedicated procedures for VA product due diligence and relied on parent company protocols.

Due to deficiencies in these protocols, the 32 VA products were not identified as virtual asset-related and were made available to clients regardless of investor classification. Saxo became aware of the issue only after its parent notified them in November 2022.

Regulatory Findings

The SFC concluded Saxo breached the Code of Conduct and Guidelines on Online Distribution and Advisory Platforms. In determining the penalty, the regulator considered the misconduct duration, Saxo’s self-reporting, voluntary client compensation, cooperation, and otherwise clean disciplinary record. Saxo ceased regulated activities in February 2025.

These enforcement actions follow a broader trend of regulatory scrutiny. In the Philippines, the regulator warned the public against using the unauthorised EXNESS GLOBAL platform due to potential investor risks. Similarly, Hong Kong’s SFC flagged CoinCola as a suspicious virtual asset platform, highlighting concerns over transparency and compliance. 

BrokersView Reminds You

SFC is an independent statutory body responsible for the securities and futures markets in Hong Kong. Its main responsibilities of which cover the supervision of the above said markets, the promoting of a healthy trading environment, customer protection and the showcasing of Hong Kong as an attractive financial market and centre within China.