The Securities and Futures Commission of Hong Kong Warns Investors about HKCEXP
The Securities and Futures Commission (SFC) in Hong Kong has issued a warning to investors regarding a suspicious cryptocurrency trading platform called HKCEXP. The platform falsely claims to be registered with the SFC, which has raised concerns about its legitimacy.
Hong Kong’s Crypto Licensing Regime and SFC’s Deadline for Exchanges
In June 2023, Hong Kong implemented its crypto licensing regime for virtual asset trading platforms. This allowed licensed exchanges to offer retail trading services. To ensure investor protection, the SFC stated that investors should only trade on licensed platforms. The regulator set a deadline of February 29 for crypto exchanges to apply for operational licenses. Exchanges failing to submit their applications were required to cease operations in Hong Kong by May 31.
- The SFC advised investors to act swiftly if they trade on platforms not listed as licensed or applicants.
- Four out of the 22 crypto trading platforms that applied for licenses had previously opted into the SFC’s regulatory framework for crypto trading platforms.
Fake Entities Posing as Legitimate Crypto Exchanges
Despite the SFC’s efforts to inform the public, fake entities continue to pose as legitimate crypto exchanges in Hong Kong. The latest warning from the SFC is about HKCEXP, which falsely claims to be registered with the regulator. The SFC accused HKCEXP of providing a fraudulent Hong Kong address for registration and imposing excessive fees for fund withdrawals.
Major Crypto Exchanges Apply for Licensing in Hong Kong
According to the SFC, 22 crypto exchanges submitted their applications before the February 29 deadline. Some of the prominent names among these applicants are OKX, Bybit, Bullish, Crypto.com, Huobi HK, Matrixport HK, and Gate.HK. The HKVAEX platform, reportedly associated with Binance, also submitted its application for consideration.
- The SFC has already granted licenses to two platforms: HashKey Exchange and OSL Digital Securities.
- Once licensed, crypto exchanges can onboard retail investors to trade Bitcoin and Ether. The SFC is currently reviewing other altcoins and stablecoins for trading approval.
BitForex’s Issues and Lack of Licensing
BitForex, an exchange that went offline on February 23 after a reported $57 million withdrawal from its hot wallets, faced scrutiny from Japanese regulators last year for operating without proper registration. Despite being headquartered in the region, BitForex was also flagged by the SFC for lacking a license to operate a Virtual Asset Trading Platform (VATP) in Hong Kong.
- BitForex users have reported various account issues and difficulties accessing the company’s website.
Verifying Trading Platforms with the SFC’s Public Register
The SFC advises investors to verify trading platforms using its public register of licensed persons and institutions. This register provides relevant information about licensed entities, including their official websites.
Hot Take: Protecting Investors in Hong Kong’s Crypto Market
Hong Kong’s Securities and Futures Commission continues to prioritize investor protection in the crypto market by warning against suspicious platforms like HKCEXP. By setting deadlines for licensing applications and maintaining a public list of licensed platforms, the SFC aims to promote safe trading and prevent fraudulent activities.
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