The Securities and Futures Commission of Hong Kong (SFC) has issued a warning about HKCEXP, a suspicious trading platform that falsely claims to be registered with the regulator.
In order to regulate the cryptocurrency market, the SFC had set a deadline of February 29 for crypto exchanges to apply for an operational license. Any exchanges that failed to submit their license applications would be required to cease operations in Hong Kong by May 31.
The SFC received license applications from a total of 22 crypto trading platforms, including four exchanges that had applied under the SFC’s previous opt-in regime for crypto trading platforms.
Despite the SFC’s efforts to make this information public, Hong Kong continues to face challenges in dealing with fraudulent entities that present themselves as legitimate crypto exchanges. The latest warning is against HKCEXP, which falsely claimed to be an “SFC-registered business” in order to attract investors.
The SFC accused HKCEXP of providing a fake Hong Kong address for registration, and one victim reported that the exchange charged excessively high fees for fund withdrawals.
To raise awareness and promote safe crypto trading, the SFC will publicly maintain a list of crypto platforms that have received operational licenses.
Crypto exchanges that failed to apply for license registration will have limited operational capabilities and will not be allowed to engage in marketing activities in Hong Kong.
In March, the SFC identified and blocked several fake websites that were impersonating major local cryptocurrency exchanges. The fraudulent online perpetrators created multiple fake domains that impersonated two licensed exchanges in Hong Kong: OSL Digital Securities and Hash Blockchain Limited, also known as HashKey.
The SFC advised investors to verify trading platforms by using its public register of licensed individuals and institutions, as well as the list of licensed virtual asset trading platforms, which provides information on legitimate entities and their official websites.
In related news, the CEO of Trezor, a cryptocurrency hardware wallet, warned that the launch of Bitcoin exchange-traded funds (ETFs) on Coinbase could make the platform a target for hackers and governments looking to gain control over users’ funds.