The Securities and Futures Commission of Hong Kong issued another warning statement to be wary of unregulated platforms

Source: Hong Kong Securities and Futures Commission

On September 13, the Hong Kong Securities and Futures Commission issued a warning statement on unregulated virtual asset trading platforms titled "Warning Statement on Unregulated Virtual Asset Trading Platforms" in a press release on its official website.

The statement stated that the Hong Kong Securities and Futures Commission has noticed that a certain virtual asset trading platform promotes the platform’s services and products to the Hong Kong public through social media influencers and over-the-counter virtual asset currency exchangers. The Securities and Futures Commission of Hong Kong stated that none of the entities under the group have been licensed and have not applied for a license to operate a virtual asset trading platform in Hong Kong.

At the same time, there are many suspicious aspects in the methods used by this virtual asset trading platform and the people and exchange shops who actively promote it to the Hong Kong public. The Hong Kong Securities and Futures Commission has notified relevant internet celebrities and over-the-counter exchange shops of its suspicions and concerns, and requested them to stop promoting the platform and its related services and products.

The Hong Kong Securities and Futures Commission warns investors to "beware of investment opportunities that seem too good to be true." Some Internet celebrities who share investment opinions on social media platforms and instant messaging software usually pay for publicity and are not investment professionals. Investors should be wary of their opinions.

This is the second time that the Hong Kong Securities and Futures Commission has issued a related statement after it issued a warning on August 7, warning against virtual asset trading platforms misleading the public. Two months ago, the Hong Kong Securities and Futures Commission issued a warning to the public that some unlicensed A virtual asset trading platform falsely claims to have submitted a license application to the China Securities Regulatory Commission, which may lead the public to mistakenly believe that the trading platform complies with the regulatory requirements of the China Securities Regulatory Commission. The Securities and Futures Commission of Hong Kong pointed out that most virtual asset trading platforms currently accessible to the public are not regulated.

On June 1 this year, a new licensing system specifically designed for virtual asset trading platforms officially came into effect. The Hong Kong Securities and Futures Commission set up a 12-month transition period to help relevant platforms comply with the legal and regulatory requirements under the new regulations. This also means that as more and more virtual asset trading platforms are licensed to operate in the future, retail customers will be able to reasonably and legally use transactions provided by licensed virtual asset trading platform operators on the premise of passing suitability assessments. Serve.

According to a previous announcement by the Hong Kong Securities and Futures Commission, a new licensing system designed for central virtual asset trading platforms that provide non-security token trading services has come into effect on June 1.

This means that operators of virtual asset trading platforms (including original platforms) planning to apply for licenses should begin to review and modify relevant systems and control measures to prepare for the new system. Operators that do not intend to apply for a license should start preparing to wind down their operations in Hong Kong in an orderly manner.

Considering that platform operators currently licensed under the Securities and Futures Ordinance may need to modify their systems and control measures to comply with the new regulations, the Hong Kong Securities and Futures Commission has specially established a 12-month transition period. Now, this The 12-month transition period has just begun, and already virtual asset trading platforms are ready to move.

The Hong Kong Securities and Futures Commission once again warned that “most virtual asset trading platforms currently accessible to the public are unregulated.” The Hong Kong Securities and Futures Commission warned that investors need to beware of those who buy and sell virtual assets on unregulated virtual asset trading platforms. risk. If a virtual asset trading platform ceases operations, goes bankrupt, is hacked, or any assets are misappropriated, investors may face the risk of losing all investments held on the platform.

Unregulated platforms carry high potential risks. These platforms may lack transparency and may not be robust in operation. Investors may not be protected. For example, many platforms have disclaimers that even if they lose investors’ virtual assets, they will not be liable. assume no responsibility. If there is a dispute between investors and the platform, they may have no way to complain, and regulators may not be able to provide assistance.

Some trading platforms may be licensed or registered by overseas regulatory agencies, but some regions may only lightly regulate virtual asset trading platforms without any investor protection measures. In addition, due to the cross-border nature, if a dispute occurs, investors may need to "complain or pursue claims across the border," and the process may be quite difficult.

Even if the platform itself is compliant, virtual assets generally have no intrinsic value and are not backed by any government or bank. Its price mainly depends on investor confidence and market supply and demand, and is easily affected by market news. The scale and number of users of many virtual assets are not large, and trading is not active, which can easily cause liquidity risks and market manipulation.

The Securities and Futures Commission once again warns investors to beware of the risks of buying and selling virtual assets on unregulated virtual asset trading platforms. If a virtual asset trading platform ceases operations, goes bankrupt, is hacked, or has any assets misappropriated, investors may It is possible to lose all the assets held on the platform. Investors may have difficulty in recourse to a platform that has no connection with Hong Kong. They may also be unable to pursue legal channels and obtain compensation. For example, the licensing status of any virtual asset trading platform If you have any questions, please refer to the SFC’s List of Virtual Asset Trading Platforms.