Hong Kong regulator the Securities and Futures Commission (SFC) proclaimed that it would crack down on cryptocurrency exchanges that are operating in this financial hub without a licence or violate local securities laws.
Investors have complained to the SFC that they were unable to withdraw fiat currencies or cryptocurrencies from their accounts opened with cryptocurrency exchanges. Some problems where about missapropriating assets by cryptocurrency exchanges. It’s said that in that way the market was manipulated and that technical breakdowns of the exchanges’ platforms caused significant losses. A lot of complaints against ICO issuers were about possible unlicensed or fraudulent activities.
“If investors cannot fully understand the risks of cryptocurrencies and ICOs or they are not prepared for a significant loss, they should not invest,” said Julia Leung, the SFC’s Executive Director of Intermediaries. “Investors who store their fiat currencies and cryptocurrencies with unregulated cryptocurrency exchanges should be aware of the risks of hacking and misappropriation of assets.”
The SFC has also written to seven unnamed ICO organizers that are soliciting investors from Hong Kong and whose tokens are considered as securities by the agency. This also came after a denial by Hong Kong-based Binance, one of the world’s biggest digital cryptocurrency exchanges, that it had been hacked after it suspended trading on Thursday. The company blamed a system upgrade for the suspension.
Be as it may, some on Twitter have kept accusing Binance of covering up a hack, especially John McAfee, who tweeted that while he wasn’t “trying to spread FUD,” he’d been receiving multiple reports alleging that Binance was really hacked. Binance responded that “Blockchain thankfully provides a public ledger that can disprove any FUD” and provided their Ethereum wallet and Bitcoin wallet addresses to prove that all money is there.
Just two days ago, lawmakers and brokers called on the Hong Kong government and regulators to tighten curbs on bitcoin, after China banned the cryptocurrency and as US and German authorities also tightened their respective regulatory oversight.
“We will continue to police the market and enforce when necessary,” said Ashley Alder, the SFC’s Chief Executive Officer. “But we are also urging market professionals to do proper gatekeeping to prevent frauds or dubious fundraising and to assist us in ensuring compliance with the law.”