The Securities and Futures Commission (SFC) of Hong Kong today warned the public of entities suspected of virtual asset-related fraudulent activities and/or operating virtual asset trading platform (VATP) in Hong Kong without a licence.
Tokencan – a purported VATP operated in Hong Kong without a licence which claims to provide cryptocurrency trading services and uses social media platforms to refer investors to its websites for investment in cryptocurrencies. It provided the SFC with false information and falsely claimed it had filed a licence application with the SFC. Investors reported withdrawal issues and their accounts were frozen subsequently.
VBIT Exchange – an entity suspected of actively marketing its purported VATP services to Hong Kong investors without a licence, and falsely claimed to be regulated by authorities in various jurisdictions on its website.
HKD.com Corporation – an entity that has adopted a name and logo that is very similar to another VATP when they are not associated. Investors were asked to deposit funds into designated bank accounts for investment purposes, but subsequently they reported difficulties with fund withdrawal.
Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, it is an offence to carry on a business of providing a virtual asset service (ie, operating a virtual asset exchange) in Hong Kong and/or actively market such services to Hong Kong investors without a licence.
At the SFC’s request, the Hong Kong Police has taken steps to block access to relevant websites and social media pages. Notwithstanding the action taken, the public should beware that scammers may continue to create websites with similar domain names.
The SFC has also posted Tokencan, VBIT Exchange and HKD.com Corporation and their respective websites on the SFC’s Suspicious Virtual Asset Trading Platforms Alert List.
Online investment scams may involve any type of assets and are perpetrated through multiple channels, and investors can suffer substantial losses. They should stay vigilant and beware of fraud when making investment decisions.
Once again, the SFC cautions investors against trading virtual assets on unregulated VATPs. Investors may risk losing their entire investment held on the platform if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. If in doubt about the licensing status of a VATP, please refer to the SFC’s List of licensed virtual asset trading platforms.
The SFC will not hesitate to take enforcement action against fraudulent or unlicensed VATPs in Hong Kong where appropriate.
