Hong Kong SFC Warns Against Crypto Entities HongKongDAO and BitCuped for Suspected Fraud

A substantial warning has been issued by the Securities and Futures Commission (SFC) of Hong Kong against two cryptocurrency firms, namely Hong Kong Digital Research Institute (commonly known as HongKongDAO) and BitCuped, both of which are accused of engaging in fraudulent operations.

In conjunction with the Hong Kong Police Force, the Special Frontiers Command (SFC) has taken the initiative to restrict access to the websites of the aforementioned companies. In order to protect investors and prevent any possible investment frauds from occurring, this urgent measure has been taken.

During the course of the investigation into HongKongDAO, it was discovered that the company may have been spreading misleading material on the internet. This information may have included false claims that it had obtained licenses and authority to engage in activities that are regulated. It was especially troubling that HongKongDAO was promoting the HKD token since it seemed to be an effort to lure investors under the pretext of a real opportunity. For this reason, the advertising was extremely concerning.

It was found that the website of BitCuped included major misrepresentations, including the misleading assertion that it was affiliated with top Hong Kong authorities Laura Cha and Nicholas Aguzin. It was determined that the information that was provided about their executive responsibilities was very misleading and had the potential to mislead prospective investors about the authenticity and validity of BitCuped Corporation.

In addition to these two companies, the SFC has issued a warning that encompasses additional platforms that are used for trading virtual assets. In addition, organizations such as JPEX and Hounax have been recognized as possible dangers since they have been disseminating misleading information on their credentials and business partnerships. In order to prevent consumers from falling victim to fraudulent schemes, the Securities and Futures Commission (SFC) encourages the general public to exercise caution while considering online investment possibilities, particularly those that are advertised via social media and messaging platforms.

This new step is in line with the statement that the SFC made some months ago in October on changes to its rules addressing the sales of digital currency and the criteria for its use. By June 2024, the Securities and Futures Commission (SFC) will require all exchanges that are functioning inside Hong Kong to get a license to operate as a virtual asset service provider. As part of the regulator’s efforts to improve consumer protection and provide a more safe environment for cryptocurrency transactions, this measure is being taken.

Image source: Shutterstock


Tagged : / / / / /

Hong Kong Security Chief Vows to Hunt Down JPEX Crypto Scam Ringleaders

Key Takeaways

* Hong Kong Security Chief Chris Tang Ping-keung vows to hunt down ringleaders of JPEX, a crypto platform involved in the city’s largest alleged financial fraud.

* Police have arrested 15 individuals and seized assets worth HK$85 million ($10.8 million), including HK$8 million in cash.

* Financial Secretary Paul Chan Mo-po emphasizes the need for a proper regulatory framework for Web3-related business ventures.

The Ongoing Investigation

Hong Kong’s Secretary for Security, Chris Tang Ping-keung, has pledged to apprehend the key operators behind JPEX, a cryptocurrency platform at the center of the city’s largest alleged financial fraud, according to SCMP. As of September 27, 2023, the police have arrested 15 individuals and seized more than HK$8 million ($1 million) in cash, along with other assets valued at HK$77 million ($9.8 million). These assets include real estate and digital currencies. The case involves suspected losses of HK$1.5 billion ($191.9 million) and has impacted more than 2,400 victims.

Regulatory Concerns

Financial Secretary Paul Chan Mo-po stated that Hong Kong must regulate business ventures related to the next generation of the internet, known as Web3. “We must incorporate business operations related to Web3 into a proper regulatory framework and crack down on any illegal activities,” Chan said. Authorities aim to impose “balanced regulations” to protect investors and prevent money laundering risks.

The Arrests

Among the 15 arrested, one was Chung Wai-hin, a 23-year-old director of over-the-counter (OTC) cryptocurrency exchange store Money Lupin. Another was influencer Sheena Leung, who runs the YouTube channel “sheung-8888,” and a staff member of OTC cryptocurrency store Unicoin. On Monday, another director of Money Lupin, Wong Sheung-yin, was arrested.

Regulatory Oversight

The Securities and Futures Commission had earlier named JPEX as an unlicensed cryptocurrency exchange with “suspicious features.” Only two platforms, HashKey and OSL, have secured a license for retail cryptocurrency trading services in Hong Kong. Four other companies are pending approval.

Image source: Shutterstock


Tagged : / / / / / / / / /

Hong Kong IFEC Warns Against Trading on Illegal and Foreign Platforms for Virtual Assets

The investor and Financial Education Council (IFEC), a public organisation under the Securities and Futures Commission (SFC), has issued a warning regarding the potential risks connected to unlicensed and foreign virtual asset trading platforms. In reaction to the growing acceptance of virtual assets, which, despite their attraction, present a high-risk investing opportunity, this advise has been offered.

The SFC has yet to authorise any platforms that can provide services to retail investors after the new regulatory framework for virtual asset trading platforms goes into effect on 1 June 2023. Investors are advised to remain cautious of the inherent dangers by IFEC, which emphasises that the bulk of these platforms that are now accessible to the public are still unregulated by the SFC.

Investors may be exposed while trading on unregulated sites. Investors may not be protected from potential dangers by such platforms’ lack of operational transparency and defined procedures. Many platforms, according to IFEC, have disclaimers that release them from liability even if they misplace investors’ virtual assets.

The IFEC also clarified potential problems brought on by disagreements between investors and platforms. Investor complaints might have few options if there is no regulatory scrutiny. Furthermore, it’s possible that the SFC won’t be able to help. The IFEC stressed that instances of fraud, security lapses, theft, or an abrupt halt to operations could result in the complete loss of virtual assets held on these platforms.

Although they might be registered or licenced with foreign regulators, offshore platforms can carry hazards. Investor protection may be compromised by some governments’ inadequate regulatory practises. Furthermore, because of their cross-border character, seeking out complaints or support abroad can be difficult. Investors may face an uphill struggle to make claims and seek legal redress if such platforms close or cease operations, the IFEC cautioned. Furthermore, local law enforcement and authorities might not be able to help if these sites have no relationship to Hong Kong.

The Hong Kong Special Administrative Region (HKSAR) needs more financial literacy, which the IFEC has long pushed for. It seeks to shield clients from the dangers of unregulated virtual asset trading platforms through this guidance, assisting them in making more knowledgeable and secure investment decisions.


Tagged : / / /
Bitcoin (BTC) $ 43,650.70 0.64%
Ethereum (ETH) $ 2,336.84 1.40%
Litecoin (LTC) $ 77.73 0.32%
Bitcoin Cash (BCH) $ 248.99 2.92%