Hong Kong SFC Issues Warning to Public of Unlicensed Virtual Asset Trading Platform MEXC & Bybit, Offence to Conduct Virtual Asset Service or Actively Market Services in Hong Kong Without a License
16th March 2024 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) has issued warnings to the public of unlicensed virtual asset trading platform (VATP) MEXC & Bybit, and is an offence to conduct virtual asset service or actively market services in Hong Kong without a license. On Bybit: “The Securities and Futures Commission (SFC) today warns the public of an unlicensed virtual asset trading platform (VATP) known as Bybit, which offers trading services in crypto-related products in a number of jurisdictions. The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any “regulated activity” in Hong Kong (Note 3). In Hong Kong, crypto-related products may constitute “futures contracts” or “securities” under the SFO and if so, dealing in and/or marketing these products – whether in Hong Kong or targeting Hong Kong investors – constitute a “regulated activity” and require a licence from the SFC unless an exemption applies (Note 4). It is a criminal offence to carry out regulated activities without a licence. It is also an offence for any person to issue advertisements, invitations or documents relating to these products to the Hong Kong public without the SFC’s authorisation. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions.” On MEXC: “The Securities and Futures Commission (SFC) today warns the public of a purported virtual asset trading platform (VATP) known as “MEXC” (Notes 1 and 2). MEXC, which is actively promoting its services to Hong Kong investors, has neither been licensed by the SFC nor applied to the SFC for a licence to operate a VATP in Hong Kong (Note 3). Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, it is an offence to carry on a business of providing a virtual asset service (ie, operating a virtual asset exchange) in Hong Kong and/or actively market such services to Hong Kong investors without a licence. Once again, the SFC cautions investors against trading virtual assets on an unregulated VATP. Investors may risk losing their entire investment held on the platform if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. If in doubt about the licensing status of a VATP, please refer to the SFC’s List of licensed virtual asset trading platforms.” More info below:
“ Hong Kong SFC Issues Warning to Public of Unlicensed Virtual Asset Trading Platform MEXC & Bybit, Offence to Conduct Virtual Asset Service or Actively Market Services in Hong Kong Without a License “
Hong Kong SFC Issues Warning to Public of Unlicensed Virtual Asset Trading Platform MEXC & Bybit, Offence to Conduct Virtual Asset Service or Actively Market Services in Hong Kong Without a License
Bybit 14th March 2024 – The Securities and Futures Commission (SFC) today warns the public of an unlicensed virtual asset trading platform (VATP) known as Bybit, which offers trading services in crypto-related products in a number of jurisdictions. The concerned crypto-related products offered by Bybit include (Notes 1 and 2):
- Bybit Futures Contracts and Inverse Futures Contracts;
- Bybit Options;
- Bybit Leveraged Tokens;
- Dual Asset;
- Dual Asset 2.0;
- Bybit Shark Fin;
- Liquidity Mining;
- ETH 2.0 Liquid Staking;
- Bybit Web3 Staking;
- Bybit Lending; and
- Bybit Wealth Management.
The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any “regulated activity” in Hong Kong (Note 3). In Hong Kong, crypto-related products may constitute “futures contracts” or “securities” under the SFO and if so, dealing in and/or marketing these products – whether in Hong Kong or targeting Hong Kong investors – constitute a “regulated activity” and require a licence from the SFC unless an exemption applies (Note 4). It is a criminal offence to carry out regulated activities without a licence. It is also an offence for any person to issue advertisements, invitations or documents relating to these products to the Hong Kong public without the SFC’s authorisation. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions. The SFC posted Bybit on the Suspicious Virtual Asset Trading Platforms Alert List and its crypto-related products on the Suspicious Investment Products Alert List on 14 March 2024. The SFC cautions investors against investing with unlicensed entities. Investors may risk losing their entire investment made with an unlicensed entity if it ceases operation, collapses or otherwise suffers from any misappropriation of assets. Seeking recourse against entities that do not have a nexus with Hong Kong is likely to be difficult and legal remedies may not be available. Last but not least, the SFC will not hesitate to take enforcement action against unlicensed activities where appropriate.
Notes:
- Bybit refers to a VATP operating at the website of https://www.bybit.com and by a Seychelles company, namely Bybit Fintech Limited. A separate website with a similar name (https://www.bybit.com.hk) is operated by a different entity – Spark Fintech Limited – which is incorporated in Hong Kong and is not involved in providing services in relation to the crypto-related products listed above.
- Please note that the crypto-related products may not be exhaustive.
- “Regulated activity” is defined in Part 1 of Schedule 5 to the Securities and Futures Ordinance (SFO).
- “Futures contracts” and “securities” are defined in section 1 of Part 1 of Schedule 1 to the SFO.
MEXC 15th March 2024 – The Securities and Futures Commission (SFC) today warns the public of a purported virtual asset trading platform (VATP) known as “MEXC” (Notes 1 and 2). MEXC, which is actively promoting its services to Hong Kong investors, has neither been licensed by the SFC nor applied to the SFC for a licence to operate a VATP in Hong Kong (Note 3). Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, it is an offence to carry on a business of providing a virtual asset service (ie, operating a virtual asset exchange) in Hong Kong and/or actively market such services to Hong Kong investors without a licence. The SFC posted MEXC and its website on the Suspicious Virtual Asset Trading Platforms Alert List on 15 March 2024.
Once again, the SFC cautions investors against trading virtual assets on an unregulated VATP. Investors may risk losing their entire investment held on the platform if it ceases operation, collapses, is hacked or otherwise suffers from any misappropriation of assets. If in doubt about the licensing status of a VATP, please refer to the SFC’s List of licensed virtual asset trading platforms. The SFC will not hesitate to take enforcement action against unlicensed platforms where appropriate.
Notes:
- MEXC refers to a VATP operating at (1) its website https://www.mexc.com/, (2) its Facebook page https://www.facebook.com/mexcofficial, (3) its telegram groups https://t.me//t.me/MEXC_ZH, https://t.me/MEXCEnglish, https://t.me/MEXC_ENofficial, (4) its X page https://twitter.com/MEXCZH, (5) its Reddit page https://www.reddit.com/r/MEXC_official/, (6) its LinkedIn page https://sc.linkedin.com/company/mexcofficial and (7) its YouTube channel https://www.youtube.com/@MEXCofficial.
- The SFC and Police have earlier warned the public of a suspected virtual-asset related fraud involving a separate entity that also uses the name “MEXC”. Please see the SFC’s press release dated 9 Feb 2024.
- MEXC recently launched a marketing campaign targeting Hong Kong investors under which new users from Hong Kong who successfully completed “KYC” within seven days of registration would be rewarded with 20 USDT. For Hong Kong users who referred friends to trade on MEXC reaching certain trading volumes, MEXC would reward such Hong Kong users with 10 MX.
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