Hong Kong, August 8: The Securities and Futures Commission (SFC) here has warned investors to be wary of the risks of trading virtual assets on unregulated virtual asset trading platforms (VATP), saying some cryptocurrency firms are making fake claims about their compliance with the commission. The SFC also noticed that some unlicensed virtual asset platforms continue to launch new services and products under their existing entities that may not comply with the applicable legal and regulatory requirements.

"The SFC has observed some unlicensed virtual asset trading platforms engaging in improper practices. This statement warns them 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," said SFC.  Some unlicensed crypto platforms claim to have submitted license applications to the SFC when in fact they have not done so. ChatGPT-Like AI Chat Tool Used by CryptoRom Scammers To Trick Users Into Scams, Says Report.

"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," said the regulatory body.  It came 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 licenses for these new entities.  Crypto Ponzi Scam: Odisha Economic Offence Wing Busts Rs 1,000 Crore Cryptocurrency Fraud, STA Crypto Token Head and Colleague Arrested.

"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," said the commission.  For example, they may 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.

The SFC warned investors to be wary of the risks of trading virtual assets on an unregulated crypto platform.  "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," it noted.

(The above story first appeared on LatestLY on Aug 08, 2023 04:09 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).