The Securities and Futures Commission (SFC) issued warnings today (Friday) regarding several entities suspected of engaging in fraudulent activities related to virtual assets. These entities are said to operate virtual asset trading platforms (VATPs) in Hong Kong without the required licenses.
SFC Flags Fraudulent Platforms
Money laundering is a broad term used to describe the process by which criminals disguise the origins and proceeds of criminal activities to make them appear to come from legitimate sources. Money laundering is a problem that involves numerous industries and sectors, including the financial services sector. While criminal funds can be successfully laundered without the assistance of the financial sector, billions of dollars worth of criminal proceeds are laundered.
According to the Anti-Money Laundering Ordinance and the Counter-Terrorist Financing Ordinance, it is illegal to offer virtual asset services to Hong Kong investors or actively market virtual asset services without a license. The identified entities in this regard are:
1. Tokencan: The platform claims to provide cryptocurrency trading services in Hong Kong without a license. Tokencan uses social media to direct investors to its website for cryptocurrency investments. The SFC pointed out that Tokencan provides false information, falsely claiming to have submitted a license application to the SFC and receiving investor reports regarding account freezes and withdrawal issues.
2. VBIT Exchange: The entity is suspected of marketing VATP services to Hong Kong investors without being licensed. It falsely claims on its website to be regulated by authorities in different jurisdictions.
3. HKD.com Company: The entity’s name and logo are very similar to another unrelated value-added tax scheme. Investors are asked to deposit funds into a designated bank account for investment. Subsequently, investors reported difficulties in withdrawing their funds.
Verify VATP License Status
In response to the SFC’s request, the Hong Kong police have taken measures to block access to the relevant websites and social media pages. However, the public should remain cautious as scammers may continue to create websites with similar domain names.
Online investment scams can involve any type of asset and are often carried out through various channels, resulting in significant losses for investors. The SFC advises the public to exercise caution when making investment decisions and to be vigilant against potential fraudulent activities.
The agency stated, “Investors may be at risk of losing their entire investments held on the platform if the platform ceases operation, collapses, is hacked, or is otherwise subject to any misappropriation of assets. If there are doubts about the VATP license status, please refer to the SFC’s list of licensed virtual asset trading platforms.”
