On March 14, the Securities and Futures Commission (SFC) of Hong Kong issued a warning to cryptocurrency traders regarding the use of the Bybit cryptocurrency exchange. The SFC identified 11 products offered by Bybit as potentially suspicious investments and listed the exchange among unlicensed operators.
Hong Kong SFC’s Warning on Bybit
Hong Kong’s SFC has turned its attention to Bybit, marking the latest move in the country’s ongoing efforts to crack down on unlicensed crypto trading platforms. As reported by a crypto journalist on X, Bybit has been singled out by the SFC due to its lack of an operating license, leading to its inclusion on the commission’s list of suspicious platforms.
Among the concerns raised by the SFC are leveraged tokens, options, futures contracts, and other similar cryptocurrency services offered by Bybit.
The commission has condemned the absence of authorization for these products, emphasizing that investors face significant financial risks and potential losses as a result. Highlighting the vulnerability of investors, the SFC cautioned crypto traders about the looming possibility of losses if unlicensed exchanges cease operations. Additionally, it underscored the potential for funds misappropriation by these dubious platforms.
In its statements, the commission acknowledged the challenges in pursuing legal action against entities operating outside Hong Kong, suggesting that legal remedies might encounter obstacles. Nevertheless, the SFC reiterated the importance of investor caution and reiterated its dedication to taking enforcement action against unlawful activities.
Hong Kong SFC’s Regulatory Duties and Response
The crackdown on illicit entities and unlicensed crypto exchange platforms persists in Hong Kong. The SFC remains steadfast in its assertion that these entities aim to exploit investors in the financial markets, particularly those interested in crypto assets.
Trading in cryptocurrencies and other digital assets is recognized as a regulated activity in Hong Kong. Therefore, it is mandatory for concerned businesses and organizations to obtain proper authorization and licenses from the SFC.
The SFC continues to urge investors and users to exercise caution, warning about the proliferation of unlicensed firms. For instance, BitForex, a well-known Virtual Asset Trading Platform (VATP), has also come under scrutiny by the commission.
The sudden disappearance of the exchange on February 23 alarmed the cryptocurrency community, with reports emerging of losses amounting to $57 million from its hot wallets.
