According to a recent report, the Hong Kong Securities and Futures Commission (SFC) is now cracking down on illegal cryptocurrency exchanges. The SFC extended its reach in its latest action, targeting the globally recognized MEXC exchange by adding it to the warning platform.
One of the serious issues flagged by the SFC is that MEXC is intentionally extending its outreach to Hong Kong investors who need to be licensed to conduct business in the region.
An official from the financial watchdog highlighted that under Hong Kong law, offering virtual asset services, such as owning and operating a crypto exchange, is illegal without obtaining a license and promoting such services locally without a license.
According to this report, this action will be implemented due to any warning related to Bybit, another cryptocurrency exchange. Currently, the SFC has listed an outstanding number of platforms, as many as 20, that do not have licenses.
SFC is asking investors to exercise caution when choosing unauthorized exchange platforms, otherwise, they may not recover their investment if the trading venue becomes inactive.
The SFC, an organization that works to fight fraud, has been very proactive concerning financial investment in the crypto space. They called public attention to fake websites of the biggest domestic and international exchanges in March.
Moreover, February 29 was the deadline for the application of VATP (Virtual Asset Trading Platform) licenses. Unlicensed exchanges were required to cease operations by the end of the indicated date or within three months if their application was denied.
Currently, only OSL Securities Limited and HashKey Holdings Limited have acquired licenses from the SFC, issued in December 2020 and November 2022, respectively. This is a testament to the regulator’s commitment to licensing compliance in the expanding crypto market.
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