The Securities and Futures Commission (SFC) issued a warning today (Friday) against several entities suspected of engaging in fraudulent virtual asset-related activities. These entities are said to be operating virtual asset trading platforms (VATPs) in Hong Kong without the required licenses.
Money laundering is a broad term used to describe the process by which criminals attempt to conceal the ownership and origin of proceeds of crime by making them appear to come from a legitimate source. It is a problem that involves numerous industries and sectors, including the financial services sector. While criminal funds may be successfully laundered without the assistance of the financial sector, billions of dollars worth of criminal proceeds are laundered.
According to the terms and regulations on anti-money laundering and counter-terrorist financing, it is strictly prohibited to offer virtual asset services to Hong Kong investors without a license or actively market such services. The identified entities in this regard are:
– Tokencan: The platform claims to offer cryptocurrency trading services in Hong Kong without a license. Tokencan uses social media to direct investors to its website for cryptocurrency investment. The SFC pointed out that Tokencan provided false information, claiming to have submitted a license application to the SFC and received investor reports on account freezing and withdrawal issues.
– VBIT Exchange: The entity is suspected of marketing VATP services to Hong Kong investors without a license. It falsely claimed on its website to be regulated by authorities in different jurisdictions.
– HKD.com Company: The entity used a name and logo that were very similar to another unrelated value-added tax concession. Investors were asked to deposit funds into a designated bank account for investment. Subsequently, investors reported difficulties in withdrawing funds.
In response to the SFC’s request, the Hong Kong police have taken measures to block access to relevant websites and social media pages. However, the public should remain cautious as scammers may continue to create websites with similar domain names.
Online investment scams can involve any type of asset and are often conducted through various channels, resulting in significant losses for investors. The SFC advises citizens to remain vigilant when making investment decisions and to be aware of potential fraudulent activities.
The SFC stated, “If the platform ceases operation, collapses, is hacked, or suffers any asset misappropriation in any other way, investors may face the risk of losing all their investments held on the platform. If there are any doubts about the VATP license status, please refer to the SFC’s list of licensed virtual asset trading platforms.”