Hong Kong Regulator Warns About Unregulated Cryptocurrency Trading Platforms and Binance
Hong Kong’s Securities and Futures Commission (SFC) has issued a warning about unregulated cryptocurrency trading platforms, particularly Binance. The regulator said that the crypto exchange is offering the trading of “stock tokens.”
The SFC issued a statement Friday warning the public about unregulated crypto trading platforms. The regulator addressed Binance in particular, stating that the global crypto exchange may be offering trading services in “stock tokens” to Hong Kong investors. The SFC detailed:
The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong.
“Stock tokens are virtual assets that are represented to be backed by different depository portfolios of underlying overseas listed stocks,” the SFC detailed.
The regulator noted that “In Hong Kong, stock tokens are likely to be ‘securities.’” For those that are considered securities, “marketing and/or distributing such tokens – whether in Hong Kong or targeting Hong Kong investors – constitute a ‘regulated activity’ and require a licence from the SFC unless an applicable exemption applies,” the announcement explains.
Thomas Atkinson, the SFC’s Executive Director of Enforcement, commented:
Investors should be wary of the risks of trading virtual assets on an unregulated platform. If the platform ceases operation, collapses, or is hacked, investors may face the possible risk of losing their entire investments held on the platform.
The SFC noted that it “has received complaints from investors who experienced difficulties in withdrawing fiat currencies or virtual assets from their accounts opened with unregulated platforms.”
Besides Hong Kong, an increasing number of regulators have issued warnings about Binance, including the U.K., Japan, Italy, Thailand, Lithuania, and the Cayman Islands.
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