- Investors run the danger of losing all their money on unregulated exchanges as per SFC.
- 20 cryptocurrency exchanges are on the warning list at the moment.
March 15 saw the addition of cryptocurrency exchange MEXC to the warning list maintained by Hong Kong’s Securities and Futures Commission (SFC). The SFC has said that MEXC is advertising its services to investors in Hong Kong even though it does not have a license to operate in the region from the SFC or a VATP license, as claimed by MEXC.
Conducting virtual asset services (i.e., running an exchange) in Hong Kong and/or aggressively promoting them to investors in Hong Kong without a license is a violation of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
Stringent Regulatory Compliance
Investors run the danger of losing all their money on unregulated exchanges, hence the securities regulator cautioned against trading digital assets on such platforms.
Just one day after the SFC put the Bybit cryptocurrency exchange to its warning list, the financial watchdog has issued another warning. 20 cryptocurrency exchanges are on the warning list at the moment.
False websites posing as prominent Hong Kong cryptocurrency exchanges have been previously shut by the SFC. Multiple malicious websites pretending to be OSL Digital Securities and Hash Blockchain Limited (also known as HashKey), two approved cryptocurrency exchanges, were warned by the SFC on March 4.
Moreover, false websites that had already been prohibited also pretended to be the MEXC exchange. As of February 9th, the SFC has banned eight domains that pose as MEXC.
Feb. 29 was the last day for cryptocurrency exchanges in Hong Kong to submit their VATP applications. By May 31st, businesses operating without the proper licensing must leave the Special Administrative Region. Similarly, exchanges that have their VATP applications denied by the SFC are also required to leave the region within three months.
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