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SFC warns Hong Kong crypto currency exchange platforms

SFC warns Hong Kong crypto currency exchange platforms

Hong Kong's Securities and Futures Commission (SFC) has tightened grip on the crypto currency exchanges and is planning to regulate the trade of Initial Coin Offerings (ICOs).

It has warned crypto currency platforms after several investors have complained of illegal practices involved which included market manipulation and misappropriation of assets.

In a statement released on Friday, it asserted that it had sent warning letters to all seven crypto currency exchange platforms and to the firms that are attempting to raise funds through ICOs.

SFC said, "We have received some complaints which claimed that the digital exchanges had misappropriated their assets. They have also complained about the technical breakdown of the exchanges' platforms that have led to significant money losses. Moreover, they also have complained about the ICO issuers' involvement in alleged unlicensed and fraudulent activities."

Ashley Alder, SFC CEO added, "We will continue to monitor and regulate the market whenever necessary."

SFC told in the statement that the investors have also voiced their concern over being unable to withdraw their funds in the form of fiat currencies or crypto currencies from their accounts.

The increased scrutiny in Hong Kong comes a few days after Chinese authorities ceased all the foreign crypto currency exchanges in a move that finally discontinued all forms of activities including virtual tokens in the mainland.

Hong Kong Binance, one of the most significant digital cryptocurrency exchanges of the world said that its software had been hacked after it suspended trading on Thursday. The company has passed the buck by blaming a system upgrade for the suspension.

Digital currencies are witnessing pressure from regulators worldwide. European and US watchdogs have already announced some measures to curb fraud involved with digital currencies. Some of the biggest banks have banned their customers from purchasing Bitcoins and other tokens using a credit card.

Currently the products being exchanged are not regulated in Hong Kong as long as they are not in the format that falls under the jurisdiction of SFC.

Regarding daily trading volume, the total number of cryptocurrency exchanges that takes place in Hong Kong or that are connected with Hong Kong rank in top 20 globally.

Alder called for market professionals to do proper gatekeeping to prevent bad or dubious fundraising and to assist them in ensuring maintenance of law and order.