Hong Kong Regulator Issues Fraud Alert On Three Exchanges

The Hong Kong Securities and Futures Commission (SFC) has issued a warning to investors regarding three entities that are suspected of engaging in fraudulent activities related to virtual assets or operating without a license

This advancement occurs in the context of Hong Kong’s endeavor to establish itself as a crypto center, thereby fostering an environment that facilitates the advancement of the crypto sector.

The Hong Kong SFC issued a fraud alert on three companies, beginning with Tokencan, in a press release on June 28. The Commission characterized Tokencan as a purported virtual asset trading platform (VATP).

Tokencan was accused by the SFC of deceiving investors by utilizing social media platforms to increase engagement on its website, which purported to provide cryptocurrency trading services.

Nevertheless, consumers encountered withdrawal issues and were ultimately prevented from accessing their accounts after making investments. It is important to note that the SFC has also reported that Tokencan provided fraudulent information during its registration with the Commission.

The SFC also accused the VBIT Exchange of actively posing as a VATP despite the absence of a license from the Commission. Furthermore, VBIT Exchange has made false claims regarding its registration with numerous local authorities and jurisdictions.

Additionally, the Securities and Futures Commission (SFC) of Hong Kong cautioned investors about the HKD.com Corporation. This company bears an identical logo and name to another VATP but lacks any affiliations. Investors have also reported difficulties in withdrawing their assets from HKD.com, similar to Tokencash.

The securities regulator has taken enforcement actions against all entities above, resulting in the police force closing all affiliated websites and social media channels. This assurance is extended to all investors. However, they recommended that all investors remain vigilant and only engage with licensed trading services.

The Commission also emphasized to current and prospective VATPs the importance of obtaining a license before commencing operations, as required by Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

The Development of Hong Kong as a Crypto Hub

Hong Kong continues to implement measures to establish a global crypto center, in addition to eliminating fraudulent and unregistered crypto platforms.

The introduction of spot Ethereum and Bitcoin exchange-traded funds (ETFs) was authorized in April by Hong Kong. To provide context, a spot ETF is an investment fund that directly holds a commodity. Spot crypto ETFs are a significant advancement in the mainstream adoption of virtual assets, as they enable investors to acquire direct exposure to the price movement of an asset.

Furthermore, Bitcoinist informed readers that the Hong Kong Institute for Monetary and Financial Research has conducted government-sponsored research on the Metaverse and decentralized finance to pioneer new frontiers in these two critical sectors of the crypto space.