Hong Kong’s regulatory body, the Securities and Futures Commission (SFC), has recently observed various unlicensed virtual asset trading platforms (VATPs) resorting to dubious practices that could jeopardize investors’ trust and capital.
These platforms are sidestepping the necessary protocols and actively misleading potential investors. With high and real stakes, how can one tread safely in the cryptocurrency market?
Hong Kong Warns of Unlicensed Crypto Exchanges
Unscrupulous entities are misleading the public by falsely claiming to have submitted licensing applications to the SFC. Such claims provide a dangerous semblance of legitimacy.
Investors must remember that misrepresentation to induce crypto trading is an offense under section 53ZRG of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
Despite transitional arrangements set up under the new regime to allow crypto exchanges to comply with regulatory requirements, some entities have brazenly set up new operations, publicizing their intent to acquire licenses. Yet, some services and products do not align with legal and regulatory requisites.
Read more: 13 Best No KYC Crypto Exchanges in 2023
One major red flag is the launching of new cryptocurrencies for retail clients or services like “deposits,” “savings,” or “earnings” that do not fit within the new regulatory framework. Indeed, such offerings raise questions about these platforms’ intentions and could hamper their potential future licensing.
Established entities of unlicensed VATPs operating in Hong Kong must also ensure they are in compliance. Not having an SFC license and conducting activities could lead to crimina
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Author: Bary Rahma
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