- Crypto exchange Bybit has come under scrutiny in Hong Kong.
- The exchange has landed on the regulator body’s warning list.
- The Hong Kong financial authority is intensifying regulatory guidelines for crypto exchanges.
Over the past few years, Hong Kong has adopted a fostering approach to the crypto industry, marked by its vision to develop a leading Asian technology hub. However, the crackdown on illegal operations by crypto exchanges such as JPEX, which caused investors significant losses, has caused the financial regulatory authority (SFC) to turn up the heat on regional service providers, mandating compliance with regulatory guidelines to ensure investor protection.
The SFC has updated its warning list of suspicious exchanges to match this.
Beware of Bybit: Hong Kong
On Thursday, March 14, the SFC published Bybit as a “suspicious” crypto exchange and trading platform, flagging 11 service offerings.
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The services include Bybit Options, Dual Asset, Dual Asset 2.0, Bybit Futures Contracts and Inverse Futures Contracts, Bybit Leveraged Tokens, Bybit Shark Fin, Liquidity Mining, Bybit Wealth Management, ETH 2.0 Liquid Staking, Bybit Web3 Staking, and Bybit Lending.
The commission emphasized that investors utilizing the platform risk permanent asset loss, as Bybit is not licensed to operate within its jurisdiction.
“If you deal with a VATP which is not licensed by the SFC, please note that it is unregulated and not supervised by the SFC. You may lose your entire investment held on the VATP if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. Seeking recourse against those VATPs without a nexus with Hong Kong can be very difficult and legal remedies may not be available,” stated the SFC.
Hong Kong’s listing of Bybit aligns with its ongoing enforcement actions, which seek to rid the local industry of unregulated service providers.
Hong Kong Bids Bye to Unregistered Exchanges
Earlier this month, the SFC announced the deadline for unlicensed exchanges to cease operations in the country.
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The regulatory decision followed the expiration of an extensive grace period, which mandated exchanges willing to maintain operations in Hong Kong to file license applications with the commission or permanently exit the market.
The SFC emphasized that “Virtual asset trading platforms operating in Hong Kong which have not submitted their license applications to the SFC by 29 February 2024 must close down their businesses in Hong Kong by 31 May 2024.”
The commission encouraged local investors to brace for the departure of the exchanges, urging caution to ensure protection against potential losses.
Read more on the ongoing enforcement actions by Hong Kong:
Hong Kong Flags Six Crypto Websites Posing as HashKey and OSL
Find out more about the mounting political pressure against spot ETFs:
Why Senators Are Fighting Against Crypto ETFs After SEC’s OK
