The Hong Kong Securities and Futures Commission (SFC) has issued an investor warning regarding three entities suspected of engaging in fraudulent activities related to virtual assets or operating without a license. The development comes as Hong Kong seeks to position itself as a cryptocurrency hub in order to create an environment conducive to growth in the cryptocurrency space.

SFC considers Tokencan, VBIT, HKD.com as frauds

IN press release On June 28, the Hong Kong SFC placed fraud warnings on three companies, starting with Tokencan, which the commission described as an alleged virtual asset trading platform (VATP).

The SFC found that Tokencan defrauded investors by using social media channels to drive engagement on its website, where it purported to offer cryptocurrency trading services. However, after investing, customers encountered problems with withdrawals and were eventually blocked from accessing their accounts. It is worth noting that the SFC finds that Tokencan provided false information when registering with the Commission.

VBIT Exchange is another entity accused by the SFC of actively posing as VATP despite the lack of a license from the Commission. Additionally, VBIT Exchange falsely claimed to be registered with several local authorities and jurisdictions.

Hong Kong’s SFC also warned investors about HKD.com Corporation, a company with an identical logo and name to another VATP but no connections. Similar to Tokencash, investors have also reported challenges in withdrawing their assets from HKD.com.

The securities regulator assures all investors that enforcement action has been taken against all the above-mentioned entities and the police have closed all related websites and social media channels. Nevertheless, they advised all investors to remain vigilant and only utilize licensed trading services.

The Commission once again drew the attention of current and future VATP entrepreneurs to the need to obtain a license before starting their business, in accordance with Hong Kong’s regulations contained in the Anti-Money Laundering and Terrorist Financing Regulation.

Hong Kong’s Journey to Being a Cryptocurrency Hub

In addition to the fight against fraudulent and unregistered cryptocurrency platforms, Hong Kong continues its efforts to establish a global cryptocurrency hub.

In April, Hong Kong approved the launch of spot Ethereum and Bitcoin ETFs (Exchange-Traded Funds). For context, a spot ETF is an investment fund that directly owns a commodity. Spot crypto ETFs allow investors to gain direct exposure to asset price movements and are a significant step in the widespread adoption of virtual assets.

Additionally, Bitcoinist reported that the Hong Kong Institute of Monetary and Financial Research conducted a government-sponsored study on decentralized finance and the Metaverse, as the island nation seeks to break recent ground in these two key sectors of the cryptocurrency space.

Featured image from NW Flags, Chart from Tradingview