HK's SFC to disclose names of cryptocurrency platform applicants

 Hong Kong’s securities watchdog said it will reveal a list of cryptocurrency firms that had applied for licences to offer trading services to retailers, following the public backlash triggered by the JPEX incident.

The Securities and Futures Commission (SFC)’s CEO Julia Leung said at a media briefing today that the watchdog will publish the list due to public demand and the list is only used to check whether virtual asset trading platforms out there are misrepresenting the licensing status.

"Being an applicant does not mean that the applicants can conform to the SFC's requirements... they remain unregulated and unlicensed until we actually process and approve their applications," she added.

Apart from OSL Digital Securities and Hash Blockchain, who had been approved to serve local retail consumers, four other companies had applied for licences, including HKVAX, HKBitEx, Hong Kong BGE and Victory Fintech Company, said the watchdog.

This comes after more than 2,300 individuals have filed complaints over JPEX incident, involving losses of over HK$1.4bn. The watchdog then clarified that JPEX is unlicensed to serve retail investors in Hong Kong. The platform has halted trades since 18 September and it said its partnered third-party market makers has frozen funds.

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The watchdog said in a recent statement that the JPEX incident highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence.

“It also shows that dissemination of information to the investing public through the Alert List, warnings and investor education can be further enhanced to help members of the investing public better understand the potential risks entailed by suspicious websites or VATPs.”

To help the public more easily identify suspicious VATPs doing business in Hong Kong, the SFC will issue a dedicated list of suspicious VATPs which is easily accessible and with prominence on the SFC’s website. The SFC will also consider providing more information about these VATPs to alert investors at an earlier stage.

Furthermore, the SFC and the IFEC will soon launch a public campaign to raise awareness in guarding against fraud and will further enhance investor education by various means such as mass media, social media and education talks, facilitating the public’s understanding of the risks associated with VAs and potential fraud.

The SFC will  continue to strengthen its intelligence gathering process towards different businesses related to VAs. It will continue to take follow-up and enforcement actions against suspicious VATPs that may have violated the law, and refer cases to the police when necessary. The SFC encourages the members of the public to file complaints regarding any suspicious activities they may encounter. 

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