On March 15, Hong Kong’s Securities and Futures Commission (SFC) escalated its regulatory oversight of the cryptocurrency industry by adding MEXC, a global cryptocurrency exchange, to its warning list.
The SFC’s announcement highlighted MEXC’s unauthorized activities in Hong Kong, including its efforts to attract local investors without possessing the requisite license or having initiated the process for a virtual asset trading platforms (VATP) license.
The regulatory body emphasized the legal implications of such actions, stating, “Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, it is an offense to carry on a business of providing a virtual asset service (i.e., operating a virtual asset exchange) in Hong Kong and/or actively marketing such services to Hong Kong investors without a license.”
In response to these developments, Cointelegraph reached out to MEXC for their comments on the matter.
Additionally, the SFC cautioned investors about the risks associated with using unlicensed exchanges for trading digital assets, including the potential total loss of their investments should these platforms cease operations.
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This warning comes closely on the heels of a similar advisory against Bybit, another crypto exchange, and expands the SFC’s warning list to include a total of 20 such platforms.
MEXC, recognized as the 11th-largest crypto exchange globally, boasts significant trading volumes and a broad cryptocurrency offering, underscoring the impact of the SFC’s warning.
The SFC has been active in safeguarding investors from fraudulent activities, previously issuing warnings against fake websites mimicking major local exchanges.
In a notable move on March 4, it alerted the public to sites impersonating OSL Digital Securities and Hash Blockchain Limited (HashKey), with MEXC also being a target of such impersonations.
As the deadline for VATP license applications expired on February 29, the SFC has made clear the implications for unlicensed exchanges operating in Hong Kong.
They must halt operations by May 31, or within three months if their VATP application is denied.
To date, only OSL exchange and HashKey Exchange have secured licenses from the SFC, on December 15, 2020, and November 9, 2022, respectively, marking a significant step towards regulatory compliance within the region’s burgeoning crypto market.
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