Hong Kong’s SFC warns crypto exchanges

The Securities and Futures Commission (SFC) of Hong Kong has issued a formal notice mandating that all cryptocurrency exchanges submit their certification applications for virtual asset trading platforms (VATPs). The specified deadline for the completion of this task is February 29, 2024. Failure to adhere to this date will result in the closure of the establishment by May 31. 

The notification was issued on February 5, whereas Hong Kong continues positioning itself as a potential crypto space. It is enforcing penalties for any misconduct that may be associated with the sector. The regulator has pledged to increase awareness of cryptocurrency and investment fraud to protect investors.

So far, OSL and HashKey Exchange are the sole two Hong Kong cryptocurrency exchanges that have been authorized to provide services to individual investors. Application processing is ongoing for fourteen companies that have submitted licensing applications. In the event that an exchange is discovered to be operating without a valid license or in violation of the law, liquidation may ensue.

The SFC emphasized that all investors ought to confirm whether the platforms they are utilizing have submitted their VATP certification applications. Regarding exchanges that have neglected to submit certification applications, they are obligated to terminate their accounts or transition to SFC-certified VATPs before May 31, 2024.

The regulator issued a rigorous notification that cautioned investors who utilize unauthorized platforms to do so at their own risk, as applying does not constitute consent. It has been recommended that they engage in virtual asset trading on SFC-certified VATPs for their own benefit.

The warning is issued in light of the fact that 12 other platforms, including the cryptocurrency exchange JPEX, are being investigated in Hong Kong.