Key Insights
- Hong Kong’ SFC warns of three unlicensed virtual asset trading platforms – Tokencan, VBIT Exchange, and HKD.com Corporation – engaged in suspected fraudulent activities.
- The regulator has taken action to block access to these platforms’ websites and social media pages.
- The SFC emphasizes the legal requirement for licensing to operate virtual asset exchanges in Hong Kong.
HONG KONG (MarketsXplora) – Hong Kong’s securities regulator issued a stark warning on Friday about suspected fraudulent activities related to virtual assets, singling out three platforms operating without proper licensing.
The Securities and Futures Commission (SFC) named Tokencan, VBIT Exchange, and HKD.com Corporation as entities of concern, citing various deceptive practices and regulatory violations.
Tokencan, purporting to offer cryptocurrency trading services, was found to be operating without a licence and had provided false information to the SFC, including a fabricated claim of having filed a licence application. Investors reported issues with withdrawals and subsequently found their accounts frozen.
VBIT Exchange allegedly marketed its unlicensed virtual asset trading platform (VATP) services aggressively to Hong Kong investors while falsely claiming regulatory approval in multiple jurisdictions.
HKD.com Corporation raised red flags for adopting branding strikingly similar to another VATP without any association. Investors were instructed to deposit funds into designated bank accounts but later encountered withdrawal difficulties.
“These unlicensed platforms pose significant risks to investors,” an SFC spokesperson told MarketsXplora. “We’ve seen cases where entire investments were lost due to platform collapses or hacks.”
The regulator emphasized that operating a virtual asset exchange in Hong Kong or actively marketing such services to Hong Kong investors without a licence is an offence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
SFC collaborates with Hong Kong Police to block access
In response to these threats, the SFC has collaborated with Hong Kong Police to block access to relevant websites and social media pages. However, the regulator cautioned that scammers might create new websites with similar domain names.
All three entities have been added to the SFC’s Suspicious Virtual Asset Trading Platforms Alert List.
The SFC reiterated its warning to investors about the risks of trading virtual assets on unregulated platforms, highlighting the potential for total loss if a platform ceases operations, collapses, or suffers from asset misappropriation.
Investors are advised to verify the licensing status of any VATP using the SFC’s official list of licensed platforms.
“We will not hesitate to take enforcement action against fraudulent or unlicensed virtual asset trading platforms in Hong Kong,” the SFC spokesperson added, signaling a tough stance on regulatory compliance in the rapidly evolving digital asset space.
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