Hong Kong’s securities regulator warned crypto investors on Monday to only use licensed trading platforms and to verify the status of the exchanges they have signed up to.
The announcement comes as the deadline approaches for Hong Kong-based virtual asset trading platforms to submit license applications. They must submit their applications by Feb. 29, or be required to cease operations by the end of May.
“Investors should check the regulatory status of a VATP from time to time and in any event on 1 March 2024,” the Securities and Future Commission’s notice said.
JUST IN – HONG KONG’s The Securities and Futures Commission requires crypto exchanges to submit a license application by Feb. 29 or shut down by May 31.
— Crypto India (@CryptooIndia) February 5, 2024
Investors with accounts on unlicensed trading platforms must close or transfer them to SFC-licensed platforms. They were cautioned that trading on exchanges that are still applicants is risky, as their approval is not assured.
As of today, the roster of licensed virtual asset trading platforms in Hong Kong only includes OSL Digital Securities and Hash Blockchain. There are 14 entities in the list of applicants, including names like OKX, HKVAX, Bybit, and DFX Labs.
SFC Alerts Investors to Unlicensed Platforms’ Deceptive Practices
In August last year, the SFC warned investors regarding unlicensed cryptocurrency platforms involved in improper practices. This advisory applied to both investors and the unlicensed platforms themselves.
In that notice, the regulator pointed out that some of these platforms falsely claimed that they had submitted applications to the regulator when they had not truly adhered to regulations. Some VATPs claiming license applications may not meet legal requirements, the SFC further warned.
Misrepresenting themselves as licensed is a crime for crypto platforms. The SFC also noted that platforms falsely asserting they are in the process of applying for a license or claiming to have obtained one could face penalties if they later seek genuine approval from the SFC.
Hong Kong’s Crypto Regulation Revamp
Hong Kong initially began to lose its crypto standing in mid-2022. This decline was generally due to concerns over its vague crypto regulations and the emergence of potential rivals like Singapore and Dubai, which were both seen as more welcoming to the cryptocurrency industry.
By 2023, Hong Kong regulators introduced a licensing program and also lifted a ban on retail crypto trading. This move indicated their intention to become a more prominent crypto hub.
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