SFC Cautions Against Unlicensed Crypto Exchange MEXC Amid Increasing Regulatory Scrutiny
Summary:
The Securities and Futures Commission (SFC) of Hong Kong issued a warning against unlicensed cryptocurrency exchange MEXC, stating it had not applied for a proper virtual asset trading platforms (VATP) license to operate. Investors were also warned about the potential risks of dealing with unregulated digital asset platforms. MEXC is the 11th biggest global crypto exchange. It is important to note that unlicensed companies that failed to submit VATP applications by February 29 will have to cease operations in Hong Kong by May 31.
The Securities and Futures Commission (SFC) in Hong Kong flagged crypto platform MEXC on March 15th, issuing a warning about its unlicensed operations. Despite actively advertising its services to the investors in Hong Kong, the exchange hasn't secured an SFC license or applied for permission to function as a virtual asset trading platform (VATP) in its jurisdiction, as per the SFC announcement.
According to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, running a virtual asset service, like a crypto exchange business, or marketing such services without possessing a license is considered an illegal act in Hong Kong. The Cointelegraph has attempted to reach MEXC for their comment.
Aside from flagging MEXC, the SFC also cautions the public about the potential risks of dealing with unregulated digital asset platforms as it could lead to total investment loss should the operation cease abruptly. This warning follows another one issued a day prior where Bybit crypto exchange was added to the SFC notice list, which now consists of 20 crypto exchange platforms.
MEXC is the 11th biggest global crypto exchange concerning trading volume, with a daily volume surpassing $2.19 billion as per CoinMarketCap data. The platform sees over three million visits per week and provides operation of 1,942 cryptocurrencies.
Previously, the SFC has taken actions against fraudulent websites imitating reputable crypto exchanges in Hong Kong. On March 4, it issued warnings about several deceitful websites that were impersonating licensed platforms such as OSL Digital Securities and Hash Blockchain Limited, also known as HashKey. Interestingly, some of the previously blocked sites were also posing as MEXC. The SFC blacklisted eight such domains on February 9.
Unlicensed companies that failed to meet the deadline for filing VATP applications on February 29 will have to halt their operations in the Special Administrative Region by May 31. Similarly, the entities whose applications get rejected will also have to withdraw from the city within three months. To date, only two crypto exchanges - the OSL exchange, licensed on December 15, 2020, and HashKey Exchange, licensed on November 9, 2022 – hold SFC licenses in Hong Kong.
Published At
3/15/2024 2:29:10 PM
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