Hong Kong Regulator Busts Fraudulent Crypto Sites, Warns Investors to Verify Platforms
Summary:
The Securities and Futures Commission (SFC) in Hong Kong has issued a warning about several fraudulent websites posing as authorized cryptocurrency platforms. The regulator has thwarted a scam involving multiple fake domains pretending to be OSL Digital Securities and HashKey. Urging investors to verify platforms before engaging in transactions, the SFC emphasized the need for vigilance, especially with reported difficulties in fund withdrawals and high fees from these sites. Recent measures to curb such fraudulent activities also include the Hong Kong Police Force blocking access to these sites. The news follows the SFC's latest licensing deadline for crypto exchanges, with non-compliant exchanges expected to exit the region within three months.
The Securities and Futures Commission (SFC) of Hong Kong, a financial regulation authority, has detected and obstructed several false websites that were mimicking well-known local cryptocurrency exchanges. On March 4, the SFC issued a formal alert regarding numerous dubious websites posing as two authorized crypto trading platforms. Fraudsters had produced several counterfeit domains imitating two certified exchanges in Hong Kong such as OSL Digital Securities and HashKey, also recognized as Hash Blockchain Limited. The SFC announcement specified that six sites including hskexpro.com, hskex.com, hskexs.com, hskexit.com, oslexu.com, and oslint.com had been blocked. These actions were instigated by reports of difficulties with fund withdrawals and unreasonable fees and commissions for withdrawals. The Hong Kong Police Force, obeying a request from the SFC, has initiated steps to prohibit access to these implicated websites. The websites are now on the SFC's official crypto alert list, sharing odd company with other sham websites that mimic other crypto exchanges, like MEXC. Previously, the SFC had blacklisted eight domains posing as MEXC on February 9.
The SFC has warned investors to double-check the trading platforms using its public register of licenced individuals and registered institutions and the list of licenced virtual asset trading platforms. This is to provide relevant information on authorised entities, including their official sites. The regulator also emphasized that "Investors should also avoid transferring money or making any transactions until they have verified the party’s legitimacy."
Bartosz Barwikowski, a layer-1 security expert at blockchain security firm Hacken, acknowledged that users may have difficulty distinguishing genuine websites from fake ones, especially when encountering a site for the first time. He recommended that users rely on trusted third parties rather than search engines or social media channels, which can easily be manipulated by fraudsters. Barwikowski provided two recommendations for users to avoid fake websites: "Use mobile apps rather than websites as they're far more difficult to falsify. They should have amassed a notable amount of reviews before you trust them. Verify the website of the third trusted party — it could be a government website or cer.live when discussing exchanges."
Recently, on February 29, the SFC finished accepting applications from crypto exchanges in the most recent round of the licensing cycle. Crypto exchanges that didn't submit applications by this deadline must depart the region within three months.
Published At
3/4/2024 2:47:30 PM
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