The Hong Kong Securities Regulatory Commission (HKSRC) warned on Thursday that investors should be cautious when dealing with non-fungible tokens (NFTs) as digital collectibles lack liquidity in the secondary market and also suffer from price volatility.
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A local news outlet Interface News reported that HKSRC noted that NFTs also lack of transparency in pricing, and subject to risk of hacks or fraud.
"Investors should be aware of these risks and should not invest in these assets if they do not fully understand NFTs and suffer potential losses."
The warning comes just a few days after Hong Kong's Securities and Futures Ordinance (SFO) and the Securities and Futures Commission (SFC) said that some NFTs have to be regulated.
The regulators claim that some digital collectibles similar in their structure to securities. Therefore, providers of these NFTs in Hong Kong are required to obtain a license from the local regulators.
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