The Securities and Futures Commission (SFC) in Hong Kong has issued a warning aimed at protecting investors from potential scams in the cryptocurrency world. Two entities – the Hong Kong Digital Research Institute and BitCuped – have been at the center of suspicion, prompting the regulator to take concrete action.
Offensive against crypto scammers
Reports released on December 6 indicate that the Hong Kong SFC has initiated action to block access to the websites of the two crypto companies. Local police were involved in the procedures. Summonses have also been issued to the operators of the sites. The SFC suspects that these entities may be spreading disinformation online, deceiving potential investors.
One of the warnings issued by the SFC focuses on the Hong Kong Digital Research Institute, also known as HongKongDAO. The institute is suspected of providing false information that could lead people to invest in HKD token, while suggesting that their services are legitimate and properly licensed. The regulator has made it clear that those named as being involved in the company’s activities have no connection to it.
Special licenses a filter against scams
Scams involving cryptocurrency entities are no exception. The SFC’s recent actions are part of a broader strategy the body is taking against the rapidly growing cryptocurrency market. In October, it announced plans to update rules on the sale of digital currencies and requirements for Hong Kong exchanges. Starting in June 2024, these exchanges will be required to be licensed by the SFC as virtual asset service providers.
It is important for investors to exercise caution and check the authenticity of information, especially for new projects or unknown players in the crypto industry. As the SFC notes, misleading information can lead to illegal investments and put those invested at risk of losing their funds.
Cryptocurrency market in the face of global change
With the cryptocurrency market evolving rapidly, regulation is becoming crucial to ensure the safety of investors. Warnings such as the one issued by the SFC are a step toward protecting against fraud and unfair practices. More and more similar regulations are popping up around the world. One of the most high-profile is MiCA, which will soon be in effect in the European Union. It will require exchanges to provide high-quality solutions, in return giving them special licenses to operate.
