Hong Kong Regulator Issues Warnings Against Unlicensed Exchanges

• The Hong Kong SFC has issued a notice regarding the operations of unlicensed crypto firms
• The unlicensed trading platforms are “engaging in improper practices” and claiming to have applied for a license.
• The regulator said that the operations of these platforms might not be in line with the legal guidelines of the SAR.
• The agency will consider any false statements and possible criminal charges if these firms actually apply for licensing.

The Hong Kong securities regulator, the Securities and Futures Commission, also known as the SFC, has issued a warning against the operations of unlicensed crypto exchanges that are currently providing their services to the citizens of the special administrative region (SAR) of China. The regulator stated that these unlicensed digital asset trading platforms are “engaging in improper practices” and asked investors to steer clear.

According to an August 7 notice circulated by the Hong Kong securities regulator, these unlicensed platforms claim to have submitted the request for licensing with the government of the special administration region and carry out operations illegally. The SFC noted that if these firms do apply for licensing with the regulator, the agency will consider any false statements and possible criminal charges.

The regulator noted that multiple unlicensed digital asset trading platforms have opened new businesses in Hong Kong, claiming that they have actually applied to be licensed with the SFC. However, “the services and products offered by some of these new entities may not be in compliance with the legal and regulatory requirements,” read the notice. The legal requirements were placed on June 1, with hundreds of companies lined up for licensing in the region.

“These established entities will also need to apply for SFC licenses, or they should proceed to close their business in Hong Kong,” said the regulator. “Conducting unlicensed activities in Hong Kong is a criminal offense.”

As reported earlier by Bitnation, the crypto plans are currently in full effect in Hong Kong, and recently, the authorities in the special administrative region have announced they are working with Saudi Arabia to promote and develop fintech in their respective countries and to cooperate to push financial innovation projects. The two are also taking part in inter-jurisdictional tokenization projects.