Hong Kong’s Market Regulator Issues Caution to Local Investors Regarding BitForex
Hong Kong’s Securities and Futures Commission (SFC) has issued a warning to its citizens regarding BitForex, a cryptocurrency exchange that is suspected of engaging in fraudulent activities. The warning comes after BitForex went offline on February 23, following the reported withdrawal of $57 million from its hot wallets.
Despite claiming to be based in Hong Kong, BitForex does not have a license from the SFC to operate as a Virtual Asset Trading Platform in the region. This is not the first time that BitForex has faced such charges, as Japanese regulators also warned against the exchange for operating in Japan without proper registration.
This situation highlights Hong Kong’s efforts to regulate the cryptocurrency industry and establish itself as a global hub for virtual assets. While the region has made progress in opening up crypto trading for retail investors and considering applications for spot crypto exchange-traded funds (ETFs), it has also faced challenges such as scams and unlicensed operations, leading to regulatory action.
In response to the situation, the SFC has requested the Hong Kong Police Force to block access to relevant website links and social media pages associated with BitForex. However, affected users have reported difficulties accessing their accounts and withdrawing assets due to the exchange’s website being shut down. BitForex and the Hong Kong police have not yet commented on the matter, leaving investors uncertain about the fate of their investments and transactions.
The SFC has also warned about the potential existence of other misleading platforms and advises investors to verify the registration status of any financial institution they plan to deal with. This emphasizes the importance of investor vigilance in navigating the cryptocurrency landscape and avoiding risks associated with unregulated or fraudulent platforms.
This incident is part of a series of warnings from Hong Kong officials about fake websites. Just last month, they cautioned people about a fake version of the crypto exchange MEXC Global, which turned out to be a scam. These incidents, along with the JPEX scandal where owners disappeared with $200 million in customer assets, highlight Hong Kong’s ongoing struggle with suspicious crypto actors.
Despite these challenges, Hong Kong remains a popular destination for crypto exchanges due to its clear regulations and its position as a key player in the Asian market. The SFC is currently reviewing applications from major exchanges such as Crypto.com, OKX, HTX, and ByBit to operate legally in the region.