Hong Kong SFC Flags Seven Unregulated Crypto Exchanges
- The Hong Kong SFC warns investors about seven unlicensed crypto exchanges suspected of fraud and extortion tactics.
- Investors are urged to use only SFC-licensed platforms for virtual asset trading to ensure safety and compliance with regulatory standards.
The Hong Kong Securities and Futures Commission (SFC) warned that seven crypto trading platforms are operating illegally without licenses. On July 5, the SFC added these exchanges to its Alert List, which names unlicensed platforms or those falsely claiming ties to Hong Kong.
Additionally, the warnings indicate that all exchanges are suspected of fraud, misleading investors to think they were registered with the SFC. Many of these exchanges used extortion methods, like blocking withdrawals and demanding "fees" to resume operations.
The HK SFC also urges investors to trade virtual assets only on SFC-licensed platforms. Moreover, they remind investors that the SFC does not formally license platforms that are just applicants and are deemed to be licensed.
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The SFC is among the first major regulators to establish a comprehensive framework for overseeing various virtual asset activities. This regime aims to cover all public interactions with virtual assets, ensuring investor protection and market integrity while managing risks to financial institutions. The SFC's approach is based on the principle of “same business, same risks, same rules.”
In February, the HK SFC issued a warning to investors regarding suspicious staking schemes associated with Floki and TokenFi. These schemes claim to offer yearly returns ranging from 30% to 100%, but the regulator cautioned that they have not been authorized for public offering.
Edited by Harshajit Sarmah
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