More than two months ago, cryptocurrency regulations in Hong Kong loosened
considerably, allowing retail traders back into the market. However, as it
turns out, the Securities and Futures Commission (SFC) has recently identified increased
improper activities being carried out by some unlicensed virtual asset trading
platforms (VATPs). Not only are these practices deceptive, but they also
endanger investors. The regulator raised four main concerns and their
implications for both VATPs and retail investors.
SFC Warns against Improper
Practices
In its
latest warning, the SFC drew attention to several important issues concerning
cryptocurrency trading in Hong Kong. The first one pertains to false
information about applying for a cryptocurrency license in the special
administrative district. The second concerns companies that do not comply with
local regulations, and the third is about firms opening their branches in Hong
Kong despite lacking the necessary authorizations. Finally, the fourth issue is
a warning explicitly directed at retail investors.
A deceptive
trend identified involves certain VATPs falsely announcing that they have
applied for licenses from the SFC, giving a false impression of their
compliance with regulatory norms. Although quite…
