Regulation
Hong Kong SFC issues fraud warning on three exchanges
The Hong Kong Securities and Futures Commission (SFC) has issued a warning to investors regarding three entities suspected of engaging in fraudulent activities related to virtual assets or operating without a license. This development comes as Hong Kong aims to position itself as a crypto hub to create an enabling environment to drive development in the crypto space.
SFC lists Tokencan, VBIT, HKD.com as scams
In a Press release On June 28, Hong Kong’s SFC issued a fraud alert on three companies, starting with Tokencan, which the Commission described as a purported virtual asset trading platform (VATP).
The SFC alleged that Tokencan deceived investors by using social media channels to boost engagement on its website where it claimed to offer cryptocurrency trading services. However, following the investments, customers encountered problems with withdrawals and were eventually blocked from accessing their accounts. Notably, the SFC claims that Tokencan also entered false information in its registration with the Commission.
VBIT Exchange was another entity accused by the SFC of actively posing as a VATP despite its lack of licensing by the Commission. In addition, VBIT Exchange also falsely claimed to be registered with various local authorities and jurisdictions.
The Hong Kong SFC also warned investors about HKD.com Corporation, a company with the same logo and name as another VATP but with no affiliations. Similar to Tokencash, investors have also reported difficulties in withdrawing their assets from HKD.com.
The securities regulator assures all investors that enforcement action has been taken against all the above-mentioned entities, with the police shutting down all affiliated websites and social media channels. However, they advised all investors to remain vigilant and only engage with authorized trading services.
The Commission also reiterated to current and future VATPs the need to obtain a license before commencing operation, as required by Hong Kong laws under the Anti-Money Laundering and Terrorist Financing Ordinance.
Hong Kong’s Journey to Cryptocurrency Hub
In addition to cracking down on fraudulent and unregistered crypto platforms, Hong Kong continues to take action to create a global crypto hub.
In April, Hong Kong approved the launch of the commercial Ethereal AND Bitcoin exchange-traded funds (ETFs). For context, a spot ETF is an investment fund that directly holds a commodity. Cryptocurrency spot ETFs allow investors to gain direct exposure to the price movement of an asset and represent a significant step in the mainstream adoption of virtual assets.
Also, Bitcoinist reported that the Hong Kong Institute for Monetary and Financial Research has conducted government-sponsored research on decentralized finance and the Metaverse as the island nation aims to break new ground in these two key sectors of the crypto space.
Featured image of NW Flags, chart by Tradingview