The Securities and Futures Commission of Hong Kong (SFC) has reported seven crypto exchanges that appear to be operating without a license, warning investors about the risks of frauds and scams.
Let’s see all the details below.
The alert from the SFC of Hong Kong on some crypto exchanges
As anticipated, the Securities and Futures Commission (SFC) of Hong Kong has added seven new crypto trading platforms to its alert list for operating illegally without licenses.
This action aims to protect investors and highlight the risks associated with scams and fraud in the cryptocurrency sector.
The list, which includes all registered, unregistered, and illegal cryptocurrency trading entities, was updated on July 5 with the following names: Taurusemex, Yomaex, Bitones.org, BTEPRO, CEG, XTCQT, and Bstorest.
The SFC has specified that these exchanges are suspected of fraudulent activities, including deceiving investors into believing they are registered with the SFC.
Furthermore, many of these platforms have used coercive methods, such as blocking withdrawals and requesting fees to resume operations.
Since 2020, the SFC alert list has grown, reaching 39 entries, with 28 exchanges reported in 2024 alone.
Security measures for investors
From the beginning of 2024, Hong Kong has intensified efforts to regulate cryptocurrency trading services. The SFC had required all cryptocurrency exchanges to obtain a license by May 31.
After this date, the exchanges that did not apply for a license were forced to close. During this period, more than 22 exchanges applied for licenses, but many withdrew their applications just before the deadline.
Recently, moreover, the authorities of Hong Kong participated in a technology conference in Toronto to promote the region’s offshore technology hub to Canadian cryptocurrency and Web3 startups.
This in collaboration with the Economic and Commercial Office of Hong Kong in Toronto, Invest Hong Kong and StartmeupHK.
Hong Kong strengthens the fight against crypto crimes: foiled kidnapping with ransom in USDT
The authorities of Hong Kong are honing their skills in managing crimes related to cryptocurrencies.
A recent report revealed that law enforcement thwarted a kidnapping attempt, in which the criminals had demanded a ransom of 660,000 USDT for the release of a boy kidnapped from the Tseung Kwan O Plaza shopping mall.
Louis Li Sze-Chung, a well-known cryptocurrency investor and advisor to the local tech start-up association 852Web3, emphasized the importance of the traceability of the stablecoin USDT.
He explained that the companies issuing USDT convert an equivalent amount in US dollars, keeping them as a reserve to guarantee the value of the stablecoin.
In case of criminal activities, the authorities can request these companies to freeze or destroy the incriminated coins.
An example of this approach was highlighted last November, when the United States Secret Service discovered a human trafficking syndicate. In response, Tether froze 225 million dollars in USDT associated with the syndicate.
Joshua Chu Kiu-wah, lawyer specializing in technological disputes and cybersecurity, highlighted the efficiency of freezing funds in stablecoin.
Chu stated that the authorities can block such funds within a day, compared to the months required in traditional banks, where the process requires a court order.
Despite the progress, the authorities in Hong Kong recognize the difficulties in combating crimes involving decentralized cryptocurrencies such as Bitcoin and Ethereum. These cryptocurrencies do not use intermediaries, making it difficult to trace the owners.
Transactions carried out through decentralized exchanges (DEX) are also untraceable, as DEX do not cooperate with enforcement agencies due to their decentralized status.
In any case, Hong Kong is making significant strides in the fight against crimes related to cryptocurrencies, leveraging the traceability of stablecoins such as USDT.
However, significant challenges remain in addressing decentralized cryptocurrencies, highlighting the need for further innovations and strategies to ensure security in the digital financial landscape.