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Unlicensed Trading Platforms in Hong Kong warned by SFC

Hong Kong’s SFC issues warning on unlicensed virtual asset trading platforms for false claims, non-compliance, and investor risks.

BC Games

Key Points

  • Hong Kong SFC warns against unlicensed virtual asset trading platforms (VATPs).
  • False claims of licensing applications deceive traders, risking legal consequences.
  • Non-compliance with SFC rules raises doubts about VATPs’ commitment to standards.
  • Investors cautioned about risks on unregulated platforms; only 2 licensed VATPs listed.

The Hong Kong Securities and Futures Commission (SFC) has recently issued a warning against several unlicensed virtual asset trading platforms (VATPs) operating in Hong Kong.

The warning, which was released on the SFC’s official website, highlights concerns regarding improper practices and potential legal consequences.

False Claims of Licensing Applications

One of the main issues identified by the SFC is the false claims made by some unlicensed VATPs regarding their license application status.

This misleading information is considered an offense as it can deceive traders into believing they are operating under the authority of a licensed platform. The SFC has made it clear that such misrepresentation will be taken into account when evaluating the fitness of VATPs for licensing.

Non-Compliance with SFC Requirements

The SFC has also noticed instances where VATPs fail to comply with the legal and regulatory requirements imposed by the new regime.

Some platforms have launched new services and products that do not adhere to these requirements, raising concerns about their commitment to compliance. This non-compliance may have serious implications for the VATPs’ ability to meet the SFC’s standards.

Transitional arrangements were put in place to allow VATPs sufficient time to prepare for compliance before June 1, 2023.

However, the SFC has observed that some unlicensed VATPs have established new entities to offer virtual asset services in Hong Kong without abiding by the new regime’s requirements. This raises doubts about their commitment to regulatory compliance.

Concluding Thoughts

The SFC takes this opportunity to caution investors about the risks associated with trading virtual assets on unregulated platforms.

Investors may face potential losses if a VATP ceases operations, collapses, falls victim to hacking, or experiences misappropriation of assets. This warning serves as a reminder to investors to exercise caution and diligence when choosing a VATP.

The SFC also maintains a list of licensed virtual asset trading platforms on its website to inform the public about the regulatory status of VATPs operating in Hong Kong. Currently, there are only two licensed VATPs, namely OSL Exchange and HashKey Exchange.

By providing this list, the SFC aims to guide investors to choose platforms that have received formal licensing from the regulatory body.

The SFC continues to closely monitor the situation and reminds both VATPs and investors to adhere to the legal and regulatory requirements governing virtual asset trading in Hong Kong.

By doing so, they can ensure compliance and contribute to a safe and thriving virtual asset trading environment in the region.