Hong Kong Cracks Down its Crypto-Exchanges

The Securities and Futures Commission (SFC), the independent statutory body that regulates securities and futures markets in Hong Kong said on Friday that it has taken action against some of its crypto-exchanges and ICO (Initial Coin Offering) issuers.

It has sent letters to 7 cryptocurrencies that have listed certain digital currencies without a license. They were warned that those cryptocurrencies that were defined as 'securities' in Securities and Futures Ordinance (SFO) required a license.

Unlike its mainland, China, unregulated trading of digital tokens is allowed in Hong Kong as long as products changing hands are not in a format that would fall under the SFC's jurisdiction, reported the South China Morning Post.

As countries worldwide are taking measures to regulate its cryptocurrency market, Hong Kong seeks to take measures to protect interests of investors after several complaints of faulty management.

SFC said in a statement, "Some complainants claimed that cryptocurrency exchanges had misappropriated their assets or manipulated the market, or that technical breakdowns of the exchanges' platforms had caused them significant losses. Several complaints against ICO issuers alleged unlicensed or fraudulent activities."

The SFC has also written to seven Initial Coin Offering (ICO) issuers.

"Most of them confirmed compliance with the SFC's regulatory regime or immediately ceased to offer tokens to Hong Kong investors," the agency confirmed, and said that it will "continue to closely monitor ICOs, and will not tolerate any violations of the securities laws of Hong Kong."