The Hong Kong Securities and Future Commission (SFC) has threatened to take regulatory measures against unregistered virtual asset trading platforms (VATPs) in the region. In a statement today, the SFC discussed how certain virtual assets service providers have engaged in some non-compliant activities. According to the regulator, these platforms falsely claim to have registered with it.
Further, the SFC noted how the misleading claims have initiated a sense of assurance among investors in Hong Kong. Consequently, making them assume that the activities of the platforms are in unison with regulatory standards in the region. Likewise, the SFC unlid how certain unregistered platforms are initiating new services and products that may not be in accordance with regulatory standards under the new regime.
However, the regulator stated that such activities could affect the eligibility of these platforms to obtain a regulatory license. The SFC added that it will investigate past violations while considering a VATP for regulatory approval. Therefore, the regulator urged the affected firms to amend any regulatory shortcomings and show “genuine efforts.”
The SFC went on to discuss how unregistered VATPs have established their physical presence in Hong Kong to provide digital assets services. As revealed, some of these firms even publicized plans to acquire regulatory approval. Meanwhile, the regulatory body in the statement revealed that some services these platforms offer may not be in line with the stipulations of the new regime.
Additionally, the SFC provided insights into some services that are not under its regulation. Services like trading for retail customers, and providing deposits and savings by unauthorized platforms are outside the SFC’s regulatory provisions.
SFC’s warning to investors amid the growing presence of virtual assets service providers in Hong Kong
Lately, Hong Kong has emerged as an attractive destination for crypto and web3 projects. This is due to the support and enabling infrastructure the Hong Kong administration has put in place. Consequently, allowing the crypto market in the region to strive. Owing to this support, prominent crypto firms like Gate.io, OKX, Haskey, and Huobi have all ventured into the virtual asset market of Hong Kong. Besides, more crypto companies are making moves to establish their presence in the region.
Meanwhile, the regulatory body cautioned investors about the dangers of using an unregistered platform. The SFC stressed that investors are liable to lose their funds on unregistered VATP. Further, the regulator said that most platforms operating in Hong Kong are unregulated presently. Similarly, the regulator urged investors to remain wary of platforms falsely claiming to have acquired regulatory approval.