The Hong Kong Securities and Futures Commission (SFC) has recently issued a stern warning against the cryptocurrency exchange Bybit, pointing out its unauthorized offerings to investors.
This cautionary notice comes in light of Bybit’s operations without the necessary licensing, spotlighting the dangers investors might face.
The SFC’s alarm bell rings for 11 of Bybit’s offerings, branding them as suspect and risky for those putting their money into them.
The regulator’s concerns extend to a variety of Bybit’s products, including but not limited to futures contracts, options, leveraged tokens, and a slew of other cryptocurrency-centric services.
These offerings, as per the SFC, have been presented to Hong Kong’s investor community without the exchange having secured the required legal permissions, thus potentially setting the stage for considerable financial peril.
In the jurisdiction of Hong Kong, any transactions involving crypto-based products are categorized under activities that necessitate formal authorization from the SFC.
The watchdog is resolute in its stance to pursue entities operating sans license, underlining the critical need for investors to tread with utmost caution.
The SFC articulated its apprehensions, stating, “Investors may risk losing their entire investment made with an unlicensed entity if it ceases operation, collapses or otherwise suffers from any misappropriation of assets.
Seeking recourse against entities that do not have a nexus with Hong Kong is likely to be difficult, and legal remedies may not be available.”
In a related development, the SFC has put Bybit on its watchlist, noting the peculiar case of its third-largest offshore exchange seeking licensing for its Hong Kong division while its offshore counterpart remains under scrutiny.
This inclusion in the warning list underscores the regulator’s vigilant stance on unlicensed cryptocurrency operations.
Parallel to the Bybit situation, the SFC has initiated a probe into BitForex following allegations of fraudulent activities.
The exchange vanished unexpectedly on February 23, along with $57 million from its wallets, stirring up the crypto community’s anxieties.
BitForex has been marked by the SFC for operating without proper registration, leading to a collaborative effort with the Hong Kong Police to restrict access to the exchange’s digital presence, aiming to shield investors from potential scams tied to unregulated crypto exchanges.