The Hong Kong regulator, Securities and Futures Commission (SFC) would crack down on cryptocurrency exchanges that operate illegally.
The official announcement of Securities and Futures Commission (SFC) of Hong Kong states it would crack down on cryptocurrency exchanges. The notice was a point to seven cryptocurrency exchanges, stating it should not trade securities without license or by violating local securities laws.
By issuing the notice, SFC warns investors against the potential risk of dealing with crowdfunding projects and cryptocurrency exchanges. However, the agency was continuously receiving complaints from Chinese citizens about the difficulty while withdrawing funds. Following such awful issues, they were facing to “technical breakdowns”, market manipulation and asset misappropriation.
Further, the complaints were also on ICOs, reported notice was issued to seven ICO issuers. These ICO companies were providing their own digital coins or tokens that claimed as fraudulent activities or unlicensed. Though, most of theme claims compliance with the regulatory regime or immediately ceased to offer tokens to Hong Kong investors, agency added.
The regulator said:
“Most of these exchanges either confirmed that they did not provide trading services for cryptocurrencies or “took immediate rectification measures”. Including removing relevant cryptocurrencies from their platforms”.
Above all, there are several critics on cryptocurrency as a bubble thus a concern of SFC towards cryptocurrency and ICO dealing comes as a sensible policy. Investors should do their due diligence before investing in any kind of digital assets.
The SFC’s Executive Director of Intermediaries, Ms Julia Leung
“If investors cannot fully understand the risks of cryptocurrencies and ICOs or they are not prepared for a significant loss. Thus they should not invest. “Investors who store their fiat currencies and cryptocurrencies with unregulated cryptocurrency exchanges should be aware of the risks of hacking and misappropriation of assets”.he added
The SFC’s Chief Executive Officer Ashley Alder, said:
“We will continue to police the market and enforce when necessary. But we are also urging market professionals to do proper gate-keeping to prevent frauds or dubious fundraising and to assist us in ensuring compliance with the law”.