Hong Kong's Watchdog Ramps Up Measures Against Unlicensed Crypto Exchanges
The Hong Kong Securities and Futures Commission (SFC) is intensifying its regulatory measures on crypto exchanges. The SFC recently announced its intention to introduce transparent tools for investors who utilize virtual asset trading platforms (VATP).
“The SFC and its subsidiary the Investor and Financial Education Council (IFEC) have been working closely together to educate and warn investors about the risks of trading on unregulated platforms,” the statement noted.
Hong Kong Emphasizes Transparency In Crypto Industry
In a recent announcement, the SFC is rolling out transparent online resources for investors to safeguard their choice of crypto exchange:
“In light of recent public concerns about unregulated virtual asset trading platforms (VATPs), the Securities and Futures Commission (SFC) is putting in place a series of measures to reinforce information dissemination and investor education.”
The SFC declared its intention to implement measures to enable investors to differentiate between crypto exchanges holding a license and those that do not. These measures include the publication of VATP lists.
The publication will provide information to investors about exchanges with active licenses. However, it will also disclose those in the process of closing down and a list of those awaiting approval.
Conversely, the SFC has granted licenses to two exchanges for operation in Hong Kong, OSL Exchange and Hashkey Exchange.
Read more: 9 Best Decentralized Exchanges for 2023
Meanwhile, it also highlights the recent challenges faced by the crypto exchange JPEX.
The SFC declared that the JPEX situation shows how risky it can be to deal with unlicensed exchanges. It further noted how important it is to have the right rules in place to keep market trust intact.
This follows reports that disclosed a substantial number of fraud complaints against JPEX. On September 19, Hong Kong authorities reported receiving 1,408 complaints accusing JPEX of engaging in fraudulent activities.
Meanwhile, the JPEX founder is reportedly evading Hong Kong authorities and is suspected to be in Australia. On September 24, reports revealed that the police intend to enlist Interpol’s support in apprehending the individuals behind JPEX.
The SFC has been vocal about the risks of investors using unlicensed crypto exchanges in recent times. On August 8, the SFC released a statement cautioning that investors could potentially lose everything dealing with such business types:
“Investors may face the possible risk of losing their entire investment held on the VATP if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets.”