The Securities and Futures Commission of Hong Kong (SFC) has issued a warning about a suspicious trading platform called HKCEXP, which claims to be registered with the regulator. In an effort to regulate the crypto industry, the SFC had set a deadline for crypto exchanges to apply for operational licenses by February 29. Exchanges that failed to submit their 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. However, despite the SFC’s efforts to make this information public, Hong Kong still faces challenges in dealing with fake entities posing 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 platform charged excessively high fees for fund withdrawals. As a measure to raise awareness about safe crypto trading, the SFC will maintain a public list of crypto platforms that receive operational licenses.
Crypto exchanges that failed to apply for license registration will have limited operational capability and will be prohibited from engaging in marketing activities in Hong Kong. In addition to the HKCEXP warning, the SFC recently identified and blocked several fake websites impersonating major local cryptocurrency exchanges. These fake domains impersonated licensed exchanges such as OSL Digital Securities and Hash Blockchain Limited, also known as HashKey.
To protect investors, the SFC advises verifying trading platforms using its public register of licensed individuals and institutions, as well as the list of licensed virtual asset trading platforms for relevant information on licensed entities, including their official websites.
In related news, the CEO of Trezor, a leading cryptocurrency hardware wallet manufacturer, has warned that Bitcoin ETFs make Coinbase a target for hackers and governments due to its status as a prominent exchange.