The Hong Kong Securities and Futures Commission (SFC) has issued a warning about HKCEXP, an allegedly suspicious cryptocurrency trading platform that claims to be registered with the regulator.
SFC warns investors against HKCEXP
June 2023. Hong Kong has officially launched a cryptocurrency licensing system for virtual asset trading platforms, allowing licensed exchanges to provide retail trading services.
In February, the SFC said investors should only trade on licensed trading platforms. The regulator set a February 29 deadline for cryptocurrency exchanges to apply for operating licenses. Exchanges that have not applied are required to cease operations in Hong Kong by May 31.
The SFC advised investors to act quickly if they transact on platforms that do not appear on either the “list of licensed virtual asset trading platforms” or the “list of applicants for virtual asset trading platforms.” The regulator urged investors to “make preparations early,” such as by closing accounts.
Of the 22 cryptocurrency trading platforms that applied for licenses, four had previously decided to adopt the SFC’s regulatory framework for cryptocurrency trading platforms.
Despite the SFC’s efforts to spread the word, Hong Kong continues to deal with fake entities posing as legitimate cryptocurrency exchanges. The regulator is warning against HKCEXP, the latest cryptocurrency exchange to falsely claim to be registered with the regulator.
The SFC accused HKCEXP of providing a false Hong Kong address for registration. In addition, as one Hong Kong citizen who used the platform told the SFC, the exchange imposed excessive fees for withdrawals.
To encourage safe cryptocurrency trading, the SFC will make a list of licensed cryptocurrency platforms available to the public. The commission said any exchange that does not apply for a license will have restrictions on its operations and advertising in Hong Kong.
Major cryptocurrency exchanges are applying for a license in Hong Kong.
According to the SFC, 22 exchanges have submitted applications before the February 29 deadline. Among these applicants are prominent names in the crypto industry, such as OKX, Bybit, Bullish, Crypto.com, Huobi HK, Matrixport HK and Gate.HK.
The HKVAEX cryptocurrency platform, reportedly affiliated with Binance, has also submitted its application for consideration. The Hong Kong SFC has already granted licenses to two platforms – namely HashKey Exchange in November 2022 and OSL Digital Securities, gaining approval a month later in December 2022.
Once licensed by the Hong Kong SFC, cryptocurrency exchanges can solicit retail investors to trade Bitcoin and Ether. The SFC is currently reviewing various altcoins and stablecoin coins for transaction approval.
on February 23, the BitForex exchange was shut down after $57 million was reportedly taken from the exchange’s hot wallets. Last year, Japanese regulators labeled BitForex as operating without proper registration.
Despite allegedly being based in the region, the SFC also flagged BitForex for not having a license to operate a virtual asset trading platform(VATP) in Hong Kong.
Users of the exchange on its official Telegram channel reported various problems with their accounts, including login difficulties and missing asset information on the dashboard. Some users also shared pop-up screens indicating that they had been blocked from accessing the company’s website.
The SFC recommends that investors verify trading platforms through the public register of licensed individuals and institutions and the list of licensed virtual asset trading platforms to access relevant information about licensed entities, including their official websites.
