Key takeaways:
- Hong Kong SFC has issued a warning against unlicensed virtual asset trading platform Bybit.
- Hong Kong SFC’s alert dubs 11 products offered by Bybit as ‘suspicious’
Hong Kong’s Securities and Futures Commission (SFC) has flagged Dubai-based derivatives exchange Bybit and 11 of its products as ‘suspicious’ in a recent announcement.
The SFC included Bybit in its ‘Suspicious Virtual Asset Trading Platforms Alert List’, citing concerns over unlicensed and risky activities in Hong Kong.
This move underscores the regulatory stance on virtual asset trading, urging platforms to obtain proper licenses for activities within the jurisdiction.
The alert specifically identifies 11 products offered by Bybit, including Bybit Futures, Bybit Options, and Bybit Leveraged Tokens.
According to the SFC, no entity within the Bybit group holds a license or registration to conduct regulated activities in Hong Kong, raising concerns about potential exposure to Hong Kong investors. The commission emphasizes its readiness to take enforcement action against unlicensed activities.
This development comes shortly after Bybit applied for a Virtual Asset Trading Platforms (VATP) license from the Hong Kong SFC. The deadline for VATP applications recently passed, with unlicensed firms required to cease operations in Hong Kong by May 31. Exchanges with rejected applications must also exit the city within three months.
In response, a spokesperson from Bybit reassured that different products are tailored for various regions to meet compliance requirements, ensuring that the flagged products are not available in the Hong Kong market.
Bybit maintains a dialogue with regulators globally, including in Hong Kong, to comply with regulations.
The SFC’s caution reflects its commitment to enforcing regulations against unlicensed activities, aligning with Hong Kong’s aim to balance investor protection with its ambition to become a global hub for crypto and virtual assets.
This action against Bybit follows a similar warning issued to BitForex, highlighting the SFC’s vigilant monitoring of the crypto space.
The SFC warns investors about the risks associated with investing in unlicensed entities. If an unlicensed entity ceases operations, collapses, or experiences asset misappropriation, investors may lose their entire investment without recourse.
