The Securities and Futures Commission (SFC) of Hong Kong has issued a warning regarding the illicit activities of the cryptocurrency exchange MEXC, which is in violation of current regulations in Hong Kong and operates without the necessary license.
In a press release issued on Friday, the SFC highlighted that MEXC has been actively promoting its services to investors in Hong Kong without obtaining a license from the SFC or even initiating the application process.
Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, conducting business as a virtual asset service provider, such as operating a virtual asset exchange, in Hong Kong without the requisite license constitutes a criminal offense.
Furthermore, the regulator emphasized that marketing such services to investors in Hong Kong without proper authorization is strictly prohibited.
MEXC has been added to the alert list by the SFC.
In light of MEXC’s unauthorized operations, the SFC has included the platform and its website in the Suspicious Virtual Asset Trading Platforms Alert List. Additionally, the regulator underscored the hazards linked to trading virtual assets on an unregulated platform.
“Once again, the SFC cautions investors against engaging in virtual asset trading on an unregulated VATP,” it stated.
“Investors may face the risk of losing their entire investment held on the platform in the event of its cessation of operation, collapse, hacking, or any misappropriation of assets.”
The SFC advised investors to consult its list of licensed virtual asset trading platforms to confirm the licensing status of a VATP.
Notably, this is not the first instance of regulatory issues for MEXC.
In April of the preceding year, Japan’s Financial Services Agency disclosed that MEXC had been operating in the country without proper registration.
Furthermore, Germany’s Federal Financial Supervisory Authority also identified MEXC for operating without authorization as recently as October.
This consumer alert follows another warning issued earlier in the week by the SFC regarding the crypto exchange Bybit.
Hong Kong is advocating for the implementation of cryptocurrency regulations.
Hong Kong is actively pursuing the establishment of comprehensive regulations governing the realm of cryptocurrencies. This push for regulatory measures underscores the recognition of the growing importance and impact of cryptocurrencies within the financial landscape of Hong Kong.
The move towards regulation reflects a proactive approach by Hong Kong authorities to address the evolving challenges and opportunities presented by cryptocurrencies. By establishing clear guidelines and frameworks for the operation and oversight of cryptocurrency-related activities, Hong Kong aims to enhance investor protection, promote market integrity, and foster innovation in the burgeoning cryptocurrency sector.
Furthermore, the push for cryptocurrency regulations in Hong Kong is indicative of the jurisdiction’s commitment to maintaining its status as a leading global financial hub. By implementing robust regulatory frameworks for cryptocurrencies, Hong Kong seeks to bolster investor confidence, attract investment, and ensure the sustainable growth of its financial ecosystem.
The efforts to regulate cryptocurrencies in Hong Kong also highlight the jurisdiction’s recognition of the need to strike a balance between fostering innovation and mitigating potential risks associated with cryptocurrencies. Through a transparent and collaborative approach to regulation, Hong Kong aims to create an enabling environment that encourages responsible innovation while safeguarding against illicit activities and protecting the interests of all stakeholders.
Overall, the advocacy for cryptocurrency regulations in Hong Kong reflects a proactive and forward-thinking approach towards embracing the opportunities presented by cryptocurrencies while effectively managing the associated risks. As cryptocurrencies continue to play an increasingly prominent role in the global economy, the establishment of clear and robust regulatory frameworks is essential to ensure the sustainable growth and resilience of Hong Kong’s financial sector in the digital age.
