In line with the ongoing regulations of the crypto space in Hong Kong, the Securities and Futures Commission has ordered about seven virtual currency exchanges to delete some tokens listed on their platforms since they fall under the securities category.
The Securities and Futures Commission (SFC) in line with its efforts to regulate the cryptocurrency market in the Asian nation have sent warning letters to seven cryptocurrency exchanges in Hong Kong to delist a number of ICO tokens with immediate effect.
In a public statement by the SFC on February 9, the regulator declared that in the letters sent to the seven Hong Kong-based exchanges, a warning was made for them to refrain from trading some tokens on their platforms because those digital assets fall under securities.
The SFC did not mention the names of these cryptocurrency exchanges but hinted they are either based in or connected to Hong Kong, and their trading volume ranks among the top 20 cryptocurrency exchanges in the world.
As written in the statement, this latest move is still part of the entire process of enlightening and cautioning investors about the risks and volatility of the market. The statement reads:
“The Securities and Futures Commission (SFC) once again alerts investors to the potential risks dealing with cryptocurrency exchanges and investing in initial coin offerings (ICOs). Following a statement on ICOs released on 5 September 2017 (Note 1), the SFC has taken regulatory action against a number of cryptocurrency exchanges and issuers of ICOs.”
The Commission has also hinted that while further actions could be taken on the issue, there is no need for such drastic measures at the moment since all the exchanges issued with the warning letter responded accordingly.
Most of these cryptocurrency exchanges either confirmed that they did not provide trading services for such cryptocurrencies or took immediate rectification measures, including removing relevant cryptocurrencies from their platforms. The SFC may take further action where appropriate, in particular against cryptocurrency exchanges which disregard the provisions of the SFO and those which are repeat offenders,” the statement reads.
The SFC has also notified about seven ICOs whose organizers are soliciting investors from Hong Kong and whose tokens are categorized as securities by the agency.
The SFC also made it clear that going forward; all hands must be on deck to ensure proper compliance with regulations.
The CEO of the Securities Futures Commission, Ashley Alder, declared, “We will continue to police the market and enforce when necessary. 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.”
On February 1, BTCManager reported that the regulatory authorities in Hong Kong were organizing a mass enlightenment campaign to enable everyone to fully understand the risks involved in initial coin offerings and cryptocurrency trading.
In the latest development, the SFC’s Executive Director of Intermediaries, Julia Leung, has advised investors who have a low-risk appetite to avoid investing in cryptocurrencies and ICOs.
In her words:
“If investors cannot fully understand the risks of cryptocurrencies and ICOs or they are not prepared for a significant loss, they should not invest. Investors who store their fiat currency and cryptocurrencies with unregulated cryptocurrency exchanges should be aware of the risks of hacking and misappropriation of assets.”
The cryptocurrency regulations in Hong Kong are much more favorable than what is obtainable in some other nations. If other countries follow in the steps of Hong Kong, then the ecosystem could thrive even more.