Hong Kong’s SFC has issued a public warning against unlicensed virtual asset trading platform Bybit, advising potential investors to exercise caution.
Hong Kong’s Securities and Futures Commission (SFC) today issued a stark warning to the public about an unlicensed virtual asset trading platform (VATP) known as Bybit. The SFC advised potential investors to exercise caution when dealing with the platform, which is not licensed or registered in Hong Kong to carry out any regulated activities related to virtual assets.Worth noting that on February 1, 2024, Bybit submitted an application for a virtual asset trading operator license to the Hong Kong Securities and Futures Commission.
Bybit, operated by Bybit Fintech Limited, a company incorporated in Seychelles, offers a suite of crypto-related products in various jurisdictions. These include futures contracts, options, leveraged tokens and several investment products that are said to be related to the crypto market. The SFC emphasized that none of the Bybit Group entities hold a license to offer these services in Hong Kong.
It is a criminal offense to engage in the trading or marketing of crypto-related products that may be considered “futures contracts” or “securities” under Hong Kong’s Securities and Futures Ordinance (SFO) without proper authorization. In addition, issuing advertisements or invitations related to such products to the public in Hong Kong without the permission of the SFC is also illegal.
The SFC took the step to include Bybit in the Warning List of Suspicious Virtual Asset Trading Platforms and the Warning List of Suspicious Investment Products, which were published on 14 March 2024. This move underlines the regulator’s commitment to protecting the integrity of Hong Financial Kong markets and protecting investors from potentially fraudulent or unregulated entities.
In an age where virtual assets are becoming more mainstream, the SFC’s warning is a timely reminder of the inherent risks associated with unregulated platforms. Investors are encouraged to check the licensing status of any platform offering opportunities to invest in virtual assets. The warning highlights the potential difficulties in seeking protection against unlicensed entities, particularly those without a strong connection to Hong Kong, and warns that investors could face the complete loss of their investments with no recourse.
The SFC’s action reflects a wider trend of regulators worldwide taking steps to protect investors in the fast-growing cryptocurrency market. This is part of a concerted effort to ensure that platforms comply with local regulations that are designed to ensure transparency, security and fairness for investors.
The SFC has made it clear that it will not hesitate to take enforcement action against unlicensed activities. This serves as a warning not only to Bybit, but also to all virtual asset trading platforms operating without the necessary licenses in jurisdictions where such regulations exist.
In conclusion, the SFC’s announcement is a critical reminder that diligence is key in navigating the complex world of virtual asset investments. Investors are encouraged to consult the SFC’s resources, including its frequently asked questions and cautionary lists, to ensure they make informed decisions in the virtual asset space.
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