Hong Kong Regulator Comes Down Hard On Unregulated Crypto Trading Platforms
Hong Kong’s financial overseer, the Securities and Futures Commission (SFC), has declared its commitment to intensify efforts in curbing unregulated cryptocurrency trading platforms within its realm. As per the announcement made on September 25, the SFC revealed its intention to compile a comprehensive list encompassing licensed, deemed licensed, closing down, and application-pending virtual asset trading platforms (VATPs). This initiative aims to equip the public with valuable information, aiding in the identification of potentially unregulated VATPs operating in Hong Kong.
Furthermore, the SFC plans to maintain a dedicated catalogue of “suspicious VATPs,” prominently displayed and easily accessible on their official website.
This decisive move comes in the wake of the ongoing JPEX crypto exchange scandal, where accusations have surfaced regarding the exchange promoting its services to Hong Kong residents without obtaining the necessary license in the country.
The estimated financial ramifications of this scandal stand at approximately $178 million. Presently, local law enforcement has received over 2,200 complaints from users adversely affected by the exchange.
To date, a total of 11 individuals, including crypto influencers, YouTubers, and employees affiliated with the purportedly deceitful crypto exchange, have been apprehended for questioning.
The SFC emphasised in a statement that the aftermath of the JPEX incident underscores the inherent risks of engaging with unregulated VATPs, underscoring the imperative for appropriate regulation to uphold market confidence.
Additionally, the regulatory body revealed plans to collaborate with local law enforcement to establish a dedicated avenue for citizens to report suspicious activities and potential legal infringements by VATPs. This collaboration seeks to facilitate a thorough investigation into the JPEX incident, aiming to bring the wrongdoers to justice.
Since the introduction of the new VATP licensing framework by Hong Kong regulators on June 1, only two cryptocurrency trading platforms—Hashkey and OSL Digital—have secured the requisite license enabling them to serve retail customers.
Despite the recent catastrophic events, the SFC acknowledged its long-standing recognition of the potential benefits cryptocurrencies and digital assets offer to financial markets. However, the regulator reiterated its identification of associated risks, including concerns related to money laundering and the protection of investors.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
