Hong Kong SFC Warns of Unlicensed Virtual Trading Platforms Providing Misleading Claims of Submitting Licence Applications to Hong Kong SFC, Fraudulen
Hong Kong, Asia's leading financial centre Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Caproasia - Learn more Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2023 Investment Day | 2023 Family Office Summits | Family Office Circle This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion. 
Hong Kong SFC Warns of Unlicensed Virtual Trading Platforms Providing Misleading Claims of Submitting Licence Applications to Hong Kong SFC, Fraudulent or Reckless Misrepresentation to Induce Investors to Trade is an Offence with Some Virtual Platforms Continue to Launch New Products & Services Including Deposits, Savings & Earnings 9th August 2023 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) has issued a statement to warn of unlicensed virtual trading platforms providing misleading claims of submitting licence applications to Hong Kong SFC, and further warning that fraudulent or reckless misrepresentation to induce investors to trade is an offence with some unlicensed virtual platforms continue to launch new products & services including deposits, savings & earnings. Hong Kong SFC: “The Securities and Futures Commission (SFC) has observed some unlicensed virtual asset trading platforms (VATPs) engaging in improper practices. This statement warns VATPs of the potential legal and regulatory consequences of these improper practices and reminds investors to be wary of the risks of trading virtual assets on unregulated VATPs. Some unlicensed VATPs claim to have submitted licence applications to the SFC when in fact they have not done so. These untrue and misleading claims give the public a false sense of assurance that the VATP is in compliance with the SFC’s regulatory requirements. It is an offence for any person to make a fraudulent or reckless misrepresentation for the purpose of inducing another person to trade in virtual assets (Note 1). The SFC will take into account any misrepresentation made by an unlicensed VATP in considering its fitness and properness to be licensed should it eventually submit licence applications to the SFC.” See below for more info.
“ Hong Kong SFC Warns of Unlicensed Virtual Trading Platforms Providing Misleading Claims of Submitting Licence Applications to Hong Kong SFC, Fraudulent or Reckless Misrepresentation to Induce Investors to Trade is an Offence with Some Virtual Platforms Continue to Launch New Products & Services Including Deposits, Savings & Earnings “
- Article continues below - Quick Links, Ads & Announcements Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2023 Investment Day | 2023 Family Office Summits | Family Office Circle Sign Up Basic Member: $5 Monthly | $60 Yearly Newsletter Daily 2 pm (Promo): $20 Monthly | $180 Yearly (FP: $680) The 2023 Investment Day | 5/9 HK & 12/9 SG Private Equity, Hedge Funds, Boutique Funds, Private Markets & more. Taking place on 5th Sept 2023 in Hong Kong, 12th Sept 2023 in Singapore. Visit | Register here The 2023 Family Office Summit | 25/10 HK & 7/11 SG Join 100+ single family offices & family office professionals in Hong Kong & Singapore Links: 2023 Family Office Summit | Register here
Hong Kong SFC Warning to investors
The SFC takes this opportunity to warn investors that some unlicensed VATPs are misleading the public by claiming to have submitted licence applications to the SFC when in fact they have not done so. Other unlicensed VATPs may have publicly announced an intention to apply for a licence from the SFC. Investors should be aware that these unlicensed VATPs may, or may not, submit a licence application after all. Most VATPs currently accessible by the public are unregulated. As and when the SFC approves a VATP to provide services to retail investors, the list of virtual asset trading platforms published on the SFC’s website will be updated. Once again, the SFC warns investors to be wary of the risks of trading virtual assets on an unregulated VATP. Investors may face the possible risk of losing their entire investment held on the VATP if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. If in doubt about the licensing status of any VATP, please refer to the SFC’s list of virtual asset trading platforms. For enquiries, please contact the SFC Fintech unit at [email protected].
Hong Kong SFC Warns of Unlicensed Virtual Trading Platforms Providing Misleading Claims of Submitting Licence Applications to Hong Kong SFC
Hong Kong, Asia’s leading financial centre - Warning: Virtual asset trading platforms engaging in improper practices
7th August 2023 – The Securities and Futures Commission (SFC) has observed some unlicensed virtual asset trading platforms (VATPs) engaging in improper practices. This statement warns VATPs of the potential legal and regulatory consequences of these improper practices and reminds investors to be wary of the risks of trading virtual assets on unregulated VATPs.
Falsely claiming to have submitted an application to the SFC
Some unlicensed VATPs claim to have submitted licence applications to the SFC when in fact they have not done so. These untrue and misleading claims give the public a false sense of assurance that the VATP is in compliance with the SFC’s regulatory requirements.
It is an offence for any person to make a fraudulent or reckless misrepresentation for the purpose of inducing another person to trade in virtual assets (Note 1). The SFC will take into account any misrepresentation made by an unlicensed VATP in considering its fitness and properness to be licensed should it eventually submit licence applications to the SFC.
VATPs which do not comply with the SFC’s requirements
The transitional arrangements under the new regime to regulate virtual asset service providers were designed to provide reasonably sufficient time for VATPs which provided virtual asset services in Hong Kong before 1 June 2023 to prepare for compliance with the legal and regulatory requirements applicable to licensed VATPs (Note 2). VATPs which consider themselves eligible for deeming under the transitional arrangements are reminded that the SFC may decide that deeming is inapplicable if it does not see a reasonable prospect for the VATPs to successfully show that they are capable of complying with the applicable legal and regulatory requirements (Note 3).
- It has come to the attention of the SFC that, anticipating the transitional arrangements, some unlicensed VATPs set up new entities to provide virtual asset services in Hong Kong. They also publicly announced their intention to apply for licences for these new entities. However, the services and products offered by some of these new entities may not be in compliance with the legal and regulatory requirements under the new regime.
- The SFC has also noticed that some unlicensed VATPs continue to launch new services and products under their existing entities that may not comply with the applicable legal and regulatory requirements.
- For example, they may, under new or existing entities, launch certain virtual assets for trading by retail clients, trading services in virtual asset derivatives, or arrangements involving virtual assets such as virtual asset “deposits”, “savings” or “earnings” which are not allowed under the new regime.
- These non-compliant activities may raise concerns about the VATPs’ intention to comply with the SFC’s legal and regulatory requirements and fitness and properness to be licensed, amongst other issues.
Where there have been past non-compliant activities, VATPs are reminded that in considering their licence applications, the SFC will take into account whether such activities could have reasonably been avoided. In particular, the SFC may take a dim view of past non-compliant behaviours which result in the need to unwind client transactions or withdraw a virtual asset admitted for retail trading if such unwinding or withdrawal could have reasonably been avoided in anticipation of the legal and regulatory requirements under the new regime. Separately, in assessing the licence applications of VATPs, the SFC will also consider whether they can demonstrate a genuine intention to rectify non-compliant activities, including gradually unwinding impermissible transactions in an orderly manner.
Unlicensed VATPs’ established entities operating in Hong Kong
The SFC also reminds unlicensed VATPs that in addition to new entities set up in anticipation of the transitional arrangements, any other established entities of unlicensed VATPs which are operating a business in Hong Kong of providing virtual asset services will also be subject to the new virtual asset service provider regime (Note 2). These established entities will also need to apply for SFC licences or they should proceed to close their business in Hong Kong. Conducting unlicensed activities in Hong Kong is a criminal offence.
Warning to investors
The SFC takes this opportunity to warn investors that some unlicensed VATPs are misleading the public by claiming to have submitted licence applications to the SFC when in fact they have not done so. Other unlicensed VATPs may have publicly announced an intention to apply for a licence from the SFC. Investors should be aware that these unlicensed VATPs may, or may not, submit a licence application after all.
Most VATPs currently accessible by the public are unregulated. As and when the SFC approves a VATP to provide services to retail investors, the list of virtual asset trading platforms published on the SFC’s website will be updated.
Once again, the SFC warns investors to be wary of the risks of trading virtual assets on an unregulated VATP. Investors may face the possible risk of losing their entire investment held on the VATP if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. If in doubt about the licensing status of any VATP, please refer to the SFC’s list of virtual asset trading platforms.
For enquiries, please contact the SFC Fintech unit at [email protected].
Notes:
You are:
InvestorProfessionalFamily OfficeExecutive
Select:
SubscriptionMembershipEvents
Interests / Events / Summits / Roundtables / Networking:
Professional InvestorPrivate WealthFamily OfficePrivate BankingWealth ManagementInvestmentsAlternativesPrivate MarketsCapital MarketsESG & SICEO & EntrepreneursTax, Legal & RisksHNW & UHNWs Insights
Your Name*
Company*
Job Title*
Email 1 (Work / Personal)*
Email 2 (Work / Personal)
Country
New to Caproasia Learn More | Sign Up | Subscribe | Register Events Caproasia Users - Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
- Professional Investor
- Family Office
- HNW Partnership
- Family Office Circle
- Family Office Networking
- Family Office Roundtable
- The Family Office Summit
- 28th March 2023 - Hong Kong
- 4th April 2023 - Singapore
- April 2023 - Virtual
- 6th June 2023 - Hong Kong
- 13th June 2023 - Singapore
- Sept 2023 - Hong Kong
- Oct 2023 - Singapore
- Oct 2023 - Hong Kong
- Visit: The Investment Day | Register: Click here
- The Investment Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
Owl Media Group takes pride in providing social-first platforms which equally benefit and facilitate engagement between businesses and consumers and creating much-needed balance to make conducting business, easier, safer, faster and better. The vision behind every platform in the Owl Media suite is to make lives better and foster a healthy environment in which parties can conduct business efficiently. Facilitating free and fair business relationships is crucial for any thriving economy and Owl Media bridges the gap and open doors for transparent and successful transacting. No advertising funds influence the functionality of our media platforms because we value authenticity and never compromise on quality no matter how lucrative the offers from advertisers may seem.